Steve Dzier Alberta Pork Pricing & Marketing Report: Week of July 23-27, 2012

Prepared by Phoenix AgriTec Inc.
Cash hogs prices were reported moderately lower the week ending July 20th due to weaker base prices and a higher Canadian dollar, which dropped the CAN/US exchange rate.  Demand from packers was seen as light due to an influx of short-term product as grain prices were thought to have spurred producers to liquidate as well as send hogs earlier to market.  Extensive drought in the US and above average temperatures in Canada has reduced consumer demand and in turn weakened packer aggressiveness for slaughter ready hogs.

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The foreign exchange rate was reported on average lower due to disruptions in Syria which caused higher crude oil prices, and fears that it might spill over into other countries and therefore reduce oil production.  For the week ending Jul 20, the 5-day average Bank of Canada noon rate lost 0.0075 basis points to 1.0120 CAN/US.

Compared to last week, Olymel fell $9.35 CAN per hog while the Sig3 dropped $8.15 CAN per hog.  Maple Leaf’s Sig4 gave back $7.85 CAN per hog as the VMR lost $7.14 US per hog.  For comparison, western Canadian prices are running near a $10 discount per hog against Tyson’s VMR.

Wholesale pork composite values were reported slightly higher than the previous week at $90.33, +0.72.  Ribs climbed $2.58 and loins gained $1.73, while butts lost $4.56.  Demand is expected to firm as August quickly approaches.  Typically prices for cutout and cash rise in this time period.  Average barrow and gilt weights for the ISM as of July 14th were down 0.5 from the previous week and 1.9 higher than the previous year at 268.5 lbs.