Farm Credit Canada said the economic outlook for Canada’s hog sector looks positive amid the reopening of the Canadian economy.
FCC principal economist Craig Klemmer said the hog sector sees strong demand domestically and in the export market. Still, higher input costs are creating some uncertainty and pressure in the marketplace.
“Things are looking pretty positive with a more opportunistic outlook including strong demand for pork domestically and in the export market showing up as much improved demand.”
Extra support comes from higher futures in the United States.
When looking at it from a North American perspective, there’s a bit of concern just on the exports. Some rules in terms of Canadian exports going to China with the resurgence of African Swine Fever in that country give Canadians less access. 
“I believe only two or three facilities left in Canada that have export approval into China. It’s opportunistic because of strong demand domestically with the reopening of the Canadian economy and the export market with some challenges about production, and that’s good.”
However, less than a full opportunity of those markets because fewer plants have China’s approval for exports.  
It all supports prices, and margins should be in that profitable area for 2021.
“It’s going to be a numbers game, so we’re going to have to keep our pencils sharp. There are different opportunities for different parts of the value chain while others continue to feel some margin compression, so we’ll have to look for those opportunities.”
Craig Klemmer is a Principal Agricultural Economist with experience in agricultural markets and risk. He has been with FCC since 2009 joining the Portfolio Analysis and Modelling team. His previous experience included two years as Livestock Specialist with the Saskatchewan Ministry of Agriculture, and prior to that he worked with the Canadian Wheat Board. Craig has a master’s degree in agricultural economics from the University of Saskatchewan.•
— By Harry Siemens