According to pig33.com a website for the professional pig community China keeps suspended over half of Canada’s pork production due to COVID-19 outbreaks in slaughterhouses.
Over 60 per cent of Canada’s production, previously eligible for export to China is suspended as of September 17, 2021.
According to a USDA report in many situations, these cases date back several months and these plants are not necessarily experiencing an active COVID-19 outbreak. Therefore, there is not a timeline for resuming export eligibility to China in these plants. The report also said that Canadian meat processors are voluntarily suspending exports to China if the COVID-19 case is identified at the plant.
Bill Alford general manager of h@ms Marketing Services in Winnipeg, MB said the outlook for hogs is up. The industry drew down stocks to historically low levels and will take a while to build those stocks back up. Yet the input costs including the feed grain prices including all the commodities are well above typical five-year averages. As a result, margins for pig producers are tight despite exceptional historically high hog prices heading into the fall and the new year.
“What’s leftover, right is what counts. We need all of the $200 average hogs to eke out a margin given the cost structure. And seemingly going to be high well into 2022 or to a new crop for the feed side.”
While good activity in the export markets in China is always the kind of wild card, they’re one player the industry can’t necessarily count on. But for their lack of being in the market, other export markets like Mexico particularly have picked up the slack. So exports are pretty much on pace where they were last year, which is one of the best years ever. So, that’s a big key and the profitability is keeping those exports robust while pig supplies have tightened.
“We have fewer pigs, and we don’t see that changing.”
The year-over-year industry numbers are about three per cent higher but not necessarily from many new buildings but increased productivity. No PED outbreaks in Manitoba or the west areas typically hit the hardest for over a year. So, everybody’s got good production numbers.
“That’s the positive here, year over year, seeing good productivity out of the hog herd in Canada.”
When looking at the members of h@ms Marketing, it’s pretty static, but seeing just every year producers reinvest in their barns. They’re 25 plus years old, the majority of them, and they need some pretty significant renovations to be the most efficient.
The Code of Practice for the Care and Handling of Pigs involves new or renovated hog barns to include group housing for sows. In the long run, hog barn renovations need to consider those codes not to have to redo it again in a few years.
Alford daily h@ms market commentary and for September 15 h@ms sold 6,600 hogs selling at a range of $2.13 to $2.27 per CKG while the following day around 7100 at in a range of $2.10 To $2.27 per CKG. h@ms number one sows sold in the range of 71 to 78 cents per pound live weight. The cash hog price was down and full contract prices closed higher. The weekly export sales report showed export demand is still good, relatively speaking and physical deliveries for the week were 45 per cent higher than the five-year average. However, cumulative net new sales are seven and a half percent lower than last year’s record pace. •
— By Harry Siemens