The Trough

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Business: Hog margins weakening in Canada, North America

January 2, 2024
By The Trough

Hog margins are weakening across North America.

That’s according to the December 2023 report from the Western Hog Exchange, which monitors national hog markets. Losses as of Dec. 1 ranged from the mid-teens ($12 to $17 per hog in Manitoba) to as high as $27.81 per hog in Ontario.

Alberta provincial livestock market analyst said on the Government of Alberta’s website that despite some moderation in feed costs, “productivity gains have resulted in oversupply in The North American Market and [are] putting pressure on hog prices.”

The next year could see continued challenges brought on by disease and weather, combined with “uncertain consumer sentiment.”


Line chart - blue (price), red (feed costs), green (total production costs): Monthly Alberta estimated hog value, feed cost and total costs ($/hog)

Source: Western Hog Exchange and Alberta Agriculture and Irrigation

CME Group Lean Hog Futures forecasts an average 2024 hog price at $2.07 per kilogram live weight, representing an 8.7% decline from 2022, but a potential 4.5% increase over the 2023 year-to-date average hog price.

Global uncertainty is attributed to factors including the Russian invasion of Ukraine, weather, inflation and new legislation in some countries, including emission-slashing targets in the Netherlands and Denmark and a carbon tax in New Zealand.

Lower global production means there is still hope for stronger prices, but Boyda adds, “Unfortunately, the pork industry may need to ride through some tough times before they arrive.”

Read the full summary here.

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