The Rural Voice, 2002-10, Page 47Advice
Bad news, good news about pork prices
By John Bancroft,
OMAF Pork Specialist
Taken From article
in Pork News & Views
Returns for the first half of 2002
have been disappointing and the
outlook for the second half of 2002 is
not bright. U.S. pork production is
anticipated to be 2-3 per cent higher
due to more pigs being processed and
heavier carcasses. At this time, a
period of losses is expected through
the fall of 2002 and into the spring of
2003.
The industry outlook entering
2002 anticipated decent market hog
prices with the opportunity to make
money and at the very least avoid
major losses. Things have changed
quickly as various factors that impact
the market have altered their course
of action. Pork supply is higher and
demand appears to be a little weaker.
Compounding the situation is larger
supplies of beef and poultry,
increased frozen stocks and a slow
response of retail prices to reflect an
oversupply. The number of pigs
processed in the first six months of
2002 in Canada and the United States
is up 2.6% from one year ago. As of
the end of April, U.S. pork exports
are down 5%; this is in line with
forecasts for the year. Canadian pork
exports are reported to be up 4.5%.
Corn and soybean prices are
currently subject to weather
fluctuations, which could lead to
higher feed prices in the fall.
However, all is not doom and
gloom! U.S. pig crop numbers,
anticipated farrowings and Canadian
exports of feeder and market pigs,
indicate the numbers for the fourth
quarter are in the 26 to 27 million
area. Previous fourth quarter
marketing numbers has been 27.6,
26.7, 25.7 and 26.5 million head in
1998, 1999, 2000 and 2001,
respectively. Maintaining the current
processing space and having
consistent weekly marketing will be
key factors during the fourth quarter.
Within Canada, processing space
has increased and no labour problems
are anticipated which impacted the
market during 1998 and 1999. The
U.S. sow slaughter as of mid-June
was up one per cent as compared to
one year ago and up eight per cent
during the last six weeks. Although
cold storage amounts are up, they are
still below the 1999 levels. The key
will be the seasonal decrease in
storage stocks over the summer
months. U.S. pork retail prices are
slightly higher this year, but the
producer share of the retail dollar is
down. Competing meats, summer
weather, the amount of money in the
consumer's pocket and the general
economy will impact domestic
consumption and the revenue
generated.
Since we keep thinking back to
1998, .one important thought comes
to mind that people expressed during
those challenging market prices. It
was critical to understand your farm
business situation and to maintain
communication with your various
industry advisors and suppliers.
There was light at the end of the
tunnel when things appeared very
dark.
One prevailing thought within the
industry is that usually when some-
thing has been well anticipated (or
thought to be) sometimes the outcome
is not as bad (or as good) as expect-
ed. We will have to wait and see!O
October 1 deadline
for OFIDP funds
Ontario farmers have received more
than $16 million in financial
assistance through the Ontario Farm
Income Disaster Program (OFIDP)
for the 2001 claim year.
Additional farmers might be
eligible and there's still time to apply
before the October 1, 2002 deadline.
OFIDP provides financial
assistance to producers who face
income reductions for reasons
beyond their control such as
declining prices, yield losses and
increased expenses.0
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Office (519) 273-3300
Toll Free 1-800-565-9983
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OCTOBER 2002 43