Canadian pig herd still in ascendancy
The latest figures released by Statistics Canada indicate that the Canadian pig herd has continued to increase, climbing almost 2% on 2016 levels to stand at 13.7 million head on 1 January 2017. This is now the fourth consecutive year of expansion.
With numbers of young pigs and slaughter pigs up 3% and 2% respectively, compared to year earlier figures, an increase in slaughterings could be anticipated in early 2017. However, in 2016 increases in the pig herd in early and mid-2016 did not translate into higher throughput for the year as a whole when slaughterings amounted to 20.4 million. Potential growth may have been mitigated by a 3% increase in live export of weaners to the US.
This trade may have had an impact on the weaner figures reported in the census. Numbers of “piglets” under 23kg were overall stable on January 2016, despite a 1% increase in the breeding herd. This stability was driven by pigs within the 7-22kg weight band, with pigs under 7kg actually showing a growth on the year of over 1%. The weak pig price in the latter half of 2016, a knock-on effect of the expanding production and declining price within the US, may also have had some negative impact on the number of sows farrowed in late 2016. Nonetheless overall, given the larger breeding herd, an increase in the number of pigs coming forward later in 2017 would still be anticipated. USDA forecasts of mid-March indicate an increase of 2% for the year but with the probability of lower carcase weights output could be flat.
For 2017, trade will play a key role in how conditions in the Canadian pig market play out. Pork exports showed a healthy 7% growth in volume last year, with the more than doubling of shipments to China particularly important. The weakness of the Canadian dollar in relation to the US dollar has helped the competitiveness of Canadian product. Whether this advantage continues will at least partly depend on how the US dollar moves under the Trump presidency. The renegotiation of NAFTA is another potential challenge for the Canadian pig industry, since a third of Canadian pork exports are sent to the US, and a further 8% is shipped to Mexico. Finding alternative markets for this pork, if necessary, could be difficult. Equally, it could bring more Canadian pork onto the Asian market and in direct competition with European and UK pork. How these factors pan out over the coming year will be critical to the global pork situation and it should be noted that Canada is the third largest exporter after the EU and the United States.
Bethan Wilkins, Analyst
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