HOGS

CANADAAnimal Numbers SWINE ('000 head)

2013

2014

2015

USDA Official Data

NEW Post Data

USDA Official Data

NEW Post Estimates

USDA Official Data

NEW Post Forecast

Total Beginning Stocks

12,610

12,610

12,955

12,955

13,280

13,448

Sow Beginning Stocks

1,188

1,188

1,193

1,193

1,198

1,198

Production (Pig Crop)

27,359

27,359

27,400

27,400

27,700

27,700

Total Imports

1

1

1

3

1

1

Total Supply

39,970

39,970

40,356

40,358

40,981

41,149

Total Exports

4,752

4,784

4,855

4,960

4,810

5,100

Total Slaughter

20,922

20,922

20,900

20,550

21,000

20,850

Loss

1,341

1,309

1,321

1,400

1,301

1,450

Ending Inventories

12,955

12,955

13,280

13,448

13,870

13,749

Total Distribution

39,970

39,970

40,356

40,358

40,981

41,149

The hog sector remains stable into 2015, on path for a very moderate growth. Inventories are expected to show a modest increase by a couple of hundred thousand head compared to the current forecast, primarily due to a lower than anticipated slaughter volume in 2014. Post estimates that export volumes in 2015 will be larger by 290,000 head compared to the existing forecast, driven by attractive export prices for feeder hogs and a favorable exchange rate, as the Canadian dollar is expected to remain about 20 percent weaker than the U.S. dollar for the entire year.

Hog slaughter is currently estimated at 150,000 head below the existing USDA forecast, as a reflection of the limited availability of finished hogs on the domestic market. In Manitoba, the Maple Leaf plant in Brandon reportedly continues to operate at about 70,000 head per week, down from 80-85,000 head per week two years ago. Environmental requirements in that province make the construction of new finishing barns very costly, and producers are not prepared for those types of investments. Recently, the provincial government in Manitoba allowed, on a pilot basis, the construction of finishing barns at five sites in 2015 and another five sites in 2016. With a normal capacity of 10,000 hogs/barn and about three production cycles per year, when fully operational these barns would supply some additional 300,000 slaughter hogs in the province. However, given the time it takes to implement these projects, Post does not anticipate any market impact in 2015.

Finally, although the 2015 hog slaughter is expected to decline compared to the current forecast, it will be some 300,000 head higher than in 2014. This is remarkable given that Ontario lost one of its plants in 2014, with the closure of Quality Meat Packers in Toronto, a plant that was killing about 30,000 head/week. By now, those volumes have been picked up in part by other plants in Ontario and in part by plants in Quebec, with an estimated volume of around 10-15,000 hogs moving weekly from Ontario into the neighboring province. In addition, some of the smaller plants in Western Canada have also added few thousand head to their weekly kills, all these supporting the higher slaughter volumes in 2015 compared to 2014.

PORK

CANADA Meat SWINE

2013

2014

2015

USDA Official Data

NEW Post Data

USDA Official Data

NEW Post Estimates

USDA Official Data

NEW Post Forecast

Slaughter (Reference)

20,922

20,922

20,900

20,550

21,000

20,850

Beginning Stocks

67

67

58

58

55

60

Production

1,819

1,819

1,830

1,815

1,860

1,840

Total Imports

220

220

210

214

210

200

Total Supply

2,106

2,106

2,098

2,087

2,125

2,100

Total Exports

1,245

1,246

1,180

1,219

1,180

1,225

Total Dom. Consumption

803

802

863

808

895

825

Ending Stocks

58

58

55

60

50

50

Total Distribution

2,106

2,106

2,098

2,087

2,125

2,100

Improvements in the relative price of feed in Canada and a solid demand for pork have led to heavier carcasses in 2014, a trend likely to continue into 2015 as well. Despite the lower slaughter volume anticipated for 2015, due the increases in carcass weights, Post lowers the pork production estimate by only 20,000 metric tons from the current official forecast. Similarly, in 2014, Post expects only a small reduction of 15,000 metric tons in pork production, although hog slaughter is estimated to decline by 350,000 head.

A weaker Canadian dollar is likely to further discourage pork imports, and Post estimates 2015 import volumes 10,000 metric tons below the existing forecast. While domestic consumption may pick up in 2015, the vast majority of Canada's pork production will continue to be consumed abroad. Supported by the exchange rate and a vigorous world demand, Post estimates pork exports at 45,000 metric tons above the current official forecast, showing a very modest growth over the previous year.

In 2014, Russia was on the way to surpass Japan as Canada's second largest export market after the United States when the food ban imposed in the middle of the year reversed that trend. Nevertheless, Russia finished the year as the third ranked destination for Canadian pork. In 2015, Post estimates that pork volumes that are no longer absorbed by the Russian market will find other destinations, such as North American markets, where Mexico has become an increasingly important import partner for Canada. Exports are also likely to pick up in countries neighboring Russia, such as Belarus, and also in some of the Asian markets.

CANADA: Total Pork Imports (Quantity in metric tons, CWE*)

1995

2000

2005

2010

2012

2013

2014

World

31,119

67,759

139,445

183,377

240,147

220,394

213,650

United States

26,320

61,883

129,818

177,495

227,437

207,558

195,935

Germany

134

0

0

0

2,329

4,485

5,253

Denmark

4,443

4,809

6,814

1,332

2,497

1,696

3,181

Chile

0

0

1,027

2,262

3,340

2,135

1,794

All other countries

222

1,067

1,786

2,288

4,544

4,520

7,487

Import Market Shares

United States

85%

91%

93%

97%

95%

94%

92%

Germany

0%

0%

0%

0%

1%

2%

2%

Denmark

14%

7%

5%

1%

1%

1%

1%

Chile

0%

0%

1%

1%

1%

1%

1%

Source: Global Trade Atlas / *Conversion to carcass weight equivalent at 1.3

CANADA: Total Pork Exports (Quantity in metric tons, CWE*)

1995

2000

2005

2010

2012

2013

2014

World

366,189

659,814

1,083,686

1,159,196

1,243,147

1,246,000

1,218,892

United States

257,416

420,854

477,899

395,559

360,655

404,305

445,901

Japan

51,434

125,661

304,063

259,966

245,622

219,367

227,920

Russia

8,819

8,110

25,499

99,563

244,036

114,532

115,888

China

299

1,929

18,045

38,998

89,002

131,126

100,882

Mexico

1,894

17,049

45,565

61,858

43,165

66,151

80,064

Korea South

5,211

14,181

57,708

56,065

68,270

49,131

46,033

Taiwan

996

6,254

12,262

27,120

23,008

30,984

32,197

Australia

3,973

13,496

44,304

50,595

36,626

36,847

30,906

Philippines

311

4,714

10,105

48,634

40,131

46,495

27,787

Chile

824

1,053

873

7,752

4,063

14,326

15,873

Hong Kong

4,717

5,947

4,015

31,439

12,291

13,355

15,453

Colombia

296

545

1,540

3,222

5,942

12,907

11,091

Belarus

0

9

842

0

0

0

9,907

New Zealand

2,813

10,836

8,688

10,861

8,004

11,517

9,418

All other countries

27,186

29,176

72,278

67,564

62,332

94,957

49,572

Export Market Shares

United States

70.3%

63.8%

44.1%

34.1%

29.0%

32.4%

36.6%

Japan

14.0%

19.0%

28.1%

22.4%

19.8%

17.6%

18.7%

Russia

2.4%

1.2%

2.4%

8.6%

19.6%

9.2%

9.5%

China

0.1%

0.3%

1.7%

3.4%

7.2%

10.5%

8.3%

Mexico

0.5%

2.6%

4.2%

5.3%

3.5%

5.3%

6.6%

Korea South

1.4%

2.1%

5.3%

4.8%

5.5%

3.9%

3.8%

Source: Global Trade Atlas / *Conversion to carcass weight equivalent at 1.3