Alberta Pork Weekly Report August 17, 2021

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Announcements, news and reminders

From Alberta Pork

Federal election 2021: producer constituencies

Where do Alberta’s commercial hog farmers live? Five target constituencies represent the overwhelming majority of independent producers, producer groups and Hutterite colonies. Find out which, and stay tuned for further information as the next federal election approaches. Learn more.

Small-scale production webinars continue

Alberta Farm Animal Care (AFAC) and Prairie Swine Health Services are hosting a three-part webinar series for small-scale producers, free of charge, with the second installment taking place next week on Wed., Sep. 1, focusing on breeds, behaviour and handling. Register now.

Exports soar when pigs fly

Can pigs really fly? Ask most major pork processors and pig genetics companies, and they would certainly have you believing so, as this unique transport channel takes off. Read the full story in the Summer 2021 edition of the Canadian Hog Journal.

Feed cost modelling

Supplied by Gowans Feed Consulting

View the latest feed price calculator

Information last updated August 18, 2021
While harvest is now underway in parts of the province, feed grain and protein prices have remained quite firm.

  • Wheat traded in a significant range over the past few weeks with current indications at $420-425 delivered Red Deer area for red wheat. There is still a good amount of wheat fields to be harvested in the area and prices may remain firm until farmers know the quantity and quality they have in the bin.
  • Barley carry out was very low and with yields off this year, new crop barley offers have remained over $400/T delivered. There is the potential for this to be pressured downwards by corn once it begins to arrive in Alberta on unit trains late October and November.
  • DDGS prices have continued to climb given the tight corn supply in the Dakotas, a natural origin point for DDGS flowing into Alberta. Offers of late have been around $390/T delivered.
  • Soybean meal remains around the $580/T mark delivered and canola meal offers firming up to around $390 after a dip earlier in the month.
  • Pea prices have taken off with low reported yields and heavy demand from the pet food market. It is becoming difficult to find pricing that provides values in swine rations.
As can be seen above, not a great deal of harvest pressure has been exerted on ingredient prices. Of note, there is a high volume of new crop corn that has been committed to moving from the US into Alberta which should be arriving late October to early November and deliveries will be sustained throughout the year. This is providing value for producers looking to manage feed cost risk by locking in forward grain buying opportunities. New crop corn to Red Deer is trading at $375-380.
Disclaimer: Gowans Feed Consulting presents the ingredient prices and feed cost modelling as a snapshot of the market using current information available at the time of the report. These findings are for informational purposes online and should not be reproduced or transmitted by any means without permission. Gowans Feed Consulting does not guarantee and accepts no legal liability arising from or connected to the accuracy, reliability or completeness of any material contained in this publication.

Hog supply and price reporting

Supplied by Agriculture and Agri-Food Canada (AAFC)

View the latest hog supply report as a PDF

Information last updated August 7, 2021

Supplied by Commodity Professionals Inc.
View the latest pork market report as a PDF

Information last updated August 17, 2021

Pricing overview

With the first half of 2021 now behind us and the market settled well into the 3rd quarter, a clearer picture of slaughter and total pork production are starting to emerge.  The impact of 2020, when liquidation occurred, has now surfaced in the numbers as shown by the US Federally Inspected Slaughter graph.

Up until late June, 2021 slaughter (red line) recorded volumes above both 2018 and 2019.  However since the long weekend in early July, 2021 slaughter has been lower than 2018 and 2019 for 5 consecutive weeks. It is worth mentioning that the declines are very minimal compared to those years, but non the less they are lower and are projeccted to continue lower for the remainder of the marketing year.

At first glance the lower slaughter, lighter weights and reduced pork production might indicate a bullish price trend into the late fall months however a quick look at December futures relative to the last 6 years show that the above mentioned bullish factors are already priced into the market.
Hog producers looking to protect against potential market weakness due to unforeseen issues that may arise later this year, should use the current pricing opporuntity to limit risk for the end of 2021 and early 2022.  The market is expected to be volatile and from the trend that appears to be forming in the December lean hog contract shown below, hedging is recommended soon than later.

Weekly hog price recap

Regional cash hogs varied with mid-week declines offsetting more modest improvements recorded in the week, while national cash declined near daily. CME cash fell every day, however generally at more conservative daily moves. Most wholesale pork values declined on the week which weighed pork cutout $2.10/cwt under the previous week’s average.

Canadian market hog values declined as much $4/hog given the decline in cash hog and pork values. The ML Sig 4 fell $4/hog, followed closely by hog values out of Ontario and Hylife and those out of Quebec fell shy of $3.50/hog. Markets derived from lagged base pricing recorded improvement with the OlyW 21 up shy of $1/hog, BP/TC up closer to $0.75/hog and the OlyW 20 was near even with the week previous. In the US, hog values out of Tyson & JM each fell near $4.75/hog from week ago levels.

Weekly hog margins

Most hog margins recorded significant weakness from week ago levels, pressured by decreased hog values and further weighed on by an increase in feed costs. Canadian farrow-to-finish feed costs climbed $1.65/hog while those in the monitored US region increased a little more, up $1.80/hog from a week earlier.
Hog margins out of the OlyW 20 weakened $1.50 to $97.25/hog profits, while those out of Quebec fell $5 to $86.40/hog profits and Ontario declined $5.50 to $84.65/hog profits. OlyW 21 margins were down $0.75 to $77.25/hog profits, Hylife margins weakened $5.40 to $75.40/hog profits, while ML Sig 4 dropped $5.60 to $70.75/hog profits. In the US, hog margins out of Tyson weakened $5.85 to nearly $75/hog profits while JM margins were $6.50 lower to $69/hog profits.

U.S. regional margins

  • Tyson: $74.88 USD x 1.2623 = $94.52 CAD
  • Morrell: $69.01 USD x 1.2623 = $87.11 CAD
Disclaimer: Commodity Professionals Inc. presents the ingredient prices and feed cost modelling as a snapshot of the market using current information available at the time of the report. These findings are for informational purposes online and should not be reproduced or transmitted by any means without permission. Commodity Professionals Inc. does not guarantee and accepts no legal liability arising from or connected to the accuracy, reliability or completeness of any material contained in this publication.