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StatsCan hog report shows rapid restructuring

Canada’s hog industry is continuing its record of rapid consolidation according to a report by Statistics Canada that shows one in five hog producers has left the industry since the start of 2008.

On January 1 there were 9,725 farms raising hogs in Canada and as of July 1 that had fallen to 8,740.

The number of hog farms nationally has been cut in half since the beginning of this decade and a recent price slump has only caused that trend to accelerate, according to the federal agency’s latest hog statistics report.

Hog inventories have declined to levels not seen since 2000 and hog producers have left the industry as soft slaughter prices and high feed costs have continued to be prevalent in the sector.

Farmers reported 13 million hogs on their farms as of July 1, a drop of 11.6 per cent from a year earlier. Escalating feed costs, along with hog prices 38 per cent below the 2005 average, has resulted in the number of hogs dropping 15 per cent from the July 2005 peak.

There has been a decline in producer numbers throughout the country, with the total decline at around 19 per cent. Leading that drop are the western provinces. Alberta has seen a 24 per cent decline and Saskatchewan a 30 per cent decline.

Industry observers say the decline has mainly affected smaller operators who lack the financial cushion to wait out the market downturn.

Domestic slaughter of hogs in Canada is up 1.4 per cent compared to last year as some slaughter facilities added to capacity by adding a second shift.

Canadian hog exports declined in the second quarter of 2008, to an estimated 2.2 million hogs, marking the first quarterly decrease in more than a year.

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