Economics

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Prairie Swine Centre is an affiliate of the University of Saskatchewan


Prairie Swine Centre is grateful for the assistance of the George Morris Centre in developing the economics portion of Pork Insight.

Financial support for the Enterprise Model Project and Pork Insight has been provided by:



Author(s): R. Plain
Publication Date: April 29, 2011
Reference: Advances in Pork Production, Volume 22. 2011.
Country: Canada

Summary:

The main factors for pork production  profits are the exchange rates, pork trade, and economy strength; and the costs mostly depend on biofuel demand and crop yields. Corn prices used to be driven primarily by weather and crop yields, and while that is still a factor, the rise of using corn for ethanol has doubled corn prices. This has led to a 50% increase in the cost of hog production. Since 2007, the Canadian dollar has been strong, but this negatively affects pork export into the USA. As well, the pork demand in the USA has been lowered due to a poor economy, but rising beef prices may increase pork consumption. The hog cycle is the supply and demand for pork, so high production will lower prices and vice versa. Compared to 30 years ago, the cycle has a much smaller amplitude – mainly because modern facilities are not equip to manage rapidly fluctuating production numbers. Plain concludes by predicting a decrease for Canadian pork export for 2011, but similar slaughter numbers to 2010

 

 

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