Manitoba Pig and Pork Industry

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1 Manitoba Pig and Pork Industry History: Manitoba farmers have been raising pigs since the province was settled by Europeans in the 18s. Pig production has fluctuated over the decades depending on market and political factors. A recent period of growth in the swine industry began in the late 197s after Manitoba lost its cattle feeding and slaughter industry to Alberta. The province expanded its hog industry, utilizing feed grains produced in the province as well as providing new jobs in pig production, pork processing and other value-added activities, such as construction and transportation. A portion of the last pig industry expansion from 199 to 27 can be attributed to both the anticipation of the elimination and the end of the Crow s Nest Pass grain transportation subsidy in 1995 and depressed grain prices from 1985 to 26. In addition, part of the industry expansion which has taken place since the mid-199s was in response to an open market and new slaughter facilities in the province and part to increased demand for high-quality feeder pigs and weanlings in the U.S. Corn Belt. Improved pig-production efficiency in Manitoba as well as an expanding market for weanling pigs in the United States virtually eliminated the fouryear production cycle in Manitoba. Historically, the cycle was due to farmers expanding pig inventories when prices rose only to contract production when hog prices fell. Pig Inventory: The number of pigs on Manitoba farms at any point in time consists of the breeding herd of sows and boars, which are on farm all year, and less than one-third of the pigs destined for market each year, ranging from newborn to near slaughter weight of about 119 kg. Sows produce, on average, 2.4 litters of pigs annually. The number of sows on Manitoba farms was a record 369,3 head on July 1, 27. Breeding herd reduction due to financial difficulties led to sow numbers declining to 313,3 head on July 1, 212 with further reduction by the end of the year. The total number of pigs on farms in mid-212 was 2,89, head, an increase of 1.6% from a year earlier, but 3.8% below the July 1, 27 record of 3,5, head. On July 1, 212, of the 2,573,6 pigs on Manitoba farms destined for market, 39% were weanling pigs weighing less than 2 kg, of which about 4% were exported, most weighing less than 7 kg. Almost 28% on farms weighed between 2 kg and 6 kg, of which about 1% were to be exported at less than 5 kg. Finally, there were about 33% in the over 6 kg category, most being fed to a slaughter weight averaging about 119 kg. Pig Production: Manitoba is the largest pig-producing and pig-exporting province in Canada with about 3% of national pig production. Annual production (net sales plus annual change in inventory) reached a record 9.45 million head in 27, more than ten times the level thirty MANITOBA PIG PRODUCTION P ' '5 1 Datasource: MAFRI, author s estimates 3,4 3,2 3, 2,8 2,6 2,4 2,2 2, 1,8 1,6 1,4 1,2 1, PIGS ON MANITOBA FARMS BY QUARTER '1 '2 '3 '4 '5 '6 '7 '8 ' Data Source: Statistics Canada TOTAL PIGS SOWS The sow herd fell by 15.4% from the peak on July 1, 27 to July 1, 212

2 years earlier in Unprecedented adverse market conditions from 28 to 21 led to herd reduction. Annual pig production rose slightly to almost 8.2 million head in 212. Value of Pig Production: The value of Manitoba pigs produced was about $91 million in 211 and close to $92 million in 212, down from almost $1 billion in 24 and 25. Production Efficiency: Manitoba pig producers produce and sell more pigs per sow annually than any other province. The quality of Manitoba pigs is among the best in Canada. Manitoba sows are the most efficient producers of pork in Canada, producing an annual average of almost 2.4 tonnes per sow in 211 compared to the Canadian average of 2.1 tonnes of pork per sow. PRODUCTIVITY PER SOW: CANADA AND MANITOBA P Feed Use: Although Manitoba pigs are fed locally-grown barley-based rations, the industry also provides an important market for Manitoba-grown feed wheat, corn, canola meal, soy meal and dry peas. The pig industry uses about two million tonnes of feed annually, of which 3% to 4% is imported from the U.S. depending on relative feed grain and soy meal prices. If all the pigs produced in Manitoba were fed to slaughter weight instead of being exported as weanlings/feeder pigs, then the feed consumed annually would almost double. Farm Location: The 26 Census of Agriculture showed that about 3% of Manitoba s pig farms are located in the Eastern Region, about 36% in the Central Region, about 16% in the Southwest Region, about 1% in the Northwest Region and 8% in the Interlake Region Canada Manitoba ' '1 '2 '3 '4 '5 '6 '7 '8 ' P Year Data source: Statistics Canada, AAFC, author s estimates Pig Densities: The number of pigs per hectare of arable land and improved pasture (land which can be fertilized by pig manure) in Manitoba varies from one Rural Municipality to the next. Areas of greatest concentration are in the south-east part of the province. Overall, at.47 pigs/ha in 211, Manitoba has one of the lowest pig densities of all major pig-producing provinces, U.S. states or countries. PIG DENSITIES FOR SELECTED REGIONS NO. OF PIGS PER HECTARE (arable land and improved pasture) SASKATCHEWAN ALBERTA MANITOBA (by wt.of pig prod.) MANITOBA Pig density (Y2) ONTARIO Arable land and improved pasture (Y1) IOWA GERMANY QUEBEC JAPAN S. KOREA N. CAROLINA BELGIUM/LUX. NETHERLANDS TAIWAN THOUSAND HECTARES Data sources: various, author s estimates Marketing Options: Manitoba hog producers organized in 1965 to form the Manitoba Hog Marketing Commission, which had a monopoly on the sale of slaughter hogs in the province, becoming the Manitoba Hog Marketing Board in Since July 1, 1996, Manitoba pig producers have had the option to market hogs to be slaughtered in the province either through Manitoba Pork Marketing Coop, brokers or directly to processing plants. In 29, Manitoba Pork Marketing Co-op and Saskatchewan s SPI Marketing Group established a new company (hog administrative marketing services) that provides hog marketing services for both provinces. 2

3 Pig Sales: Net Manitoba pig sales exceeded 8.1 million head in 212, of which about 3.7 million head or 46% were sold out of the province. Mandatory Country-of-Origin Labelling (mcool) in the United States resulted in reduced demand for Manitoba weanlings and feeder pigs by American finishing operations as some major hog slaughter plants refused to kill Canadian-born pigs. Since peaking at 4.5 million head in 27, weanling pig exports fell each year until 211. Of all pig sales in 212, preliminary trade data show that about 2.25 million head were exported to the United States and about.15 million went to other provinces weighing less than 7 kg. In addition, about.25 million pigs were exported at weights of 7-23 kg (less than one-fifth of a slaughter hog s weight),.8 million head were 23-5 kg and roughly.42 million (including hogs from Saskatchewan counted as from Manitoba) were 5 kg and over, most for slaughter. Almost 4.36 million Manitoba hogs were slaughtered in Canada. In the early 199s, many more Manitoba pigs were shipped east than to the United States. Farm Cash Receipts from Pig Sales: The swine industry was the largest source of farm cash receipts of any Manitoba agricultural commodity sold from 1999 to 27, but record high crop prices raised cash receipts from sales of both canola and wheat in 28 and 29 above those from pigs. Pig receipts were second only to canola in 21 and 211. (212 data are not available yet) According to Statistics Canada, pig sales contributed 21% of Manitoba s farm cash receipts from the market (excluding direct program payments) in 211. The share is down from 31% in 25. Cash receipts from pigs rose from $816.5 million in 21 to $925.1 million in 211. Pork Processing: Red meat processing, Manitoba s largest food processing sector, produced an estimated $1.5 billion of meat and meat products in 211, about 4% of the value of total food and beverage processing in the province. The sector employed over 4, people. Raw inputs, mostly hogs with very small numbers of cattle and sheep, accounted for most of the meat processing industry's estimated total cost of materials and supplies. Manitoba processes over one-quarter of the hogs slaughtered in Canada, the second most after Quebec. Demand for hogs by Manitoba pork processors has been increasing steadily since 26 to a record 5.57 million head in 212, but more than one-fifth of hogs slaughtered in Manitoba come from Saskatchewan and Alberta. Almost 4.36 million Manitoba hogs were processed in Canadian federal and provincial plants in 212, almost all in Manitoba. This was up by.8 million hogs from MB-origin hog slaughter in Canada Slaughter hog exports to U.S MANITOBA PIG SALES BY TYPE 2-212P Pig exports 23 to under 5 kg to U.S. Pig exports under 7 kg to U.S. Pig exports 7 to under 23 kg to U.S. Weanlings to Que, Sask, Ont P Data source: Statistics Canada, AAFC, author s projection EXOTIC LIVEST/PMU 4.2% PIGS 44.7% MANITOBA LIVESTOCK TYPE: PERCENT OF LIVESTOCK CASH RECEIPTS, 21 and Data source: Statistics Canada, author s estimates CATTLE 32.% DAIRY 8.8% POULTRY 8.3% OTHER LIVESTOCK 2.1% PIGS 49.2% 211 EXOTIC LIVEST/PMU 1.3% OTHER LIVESTOCK 2.7% INSPECTED HOG SLAUGHTER BY PROVINCE, CATTLE 22.4% POULTRY 11.4% DAIRY 13.% B.C. AB SK MB ON QUE ATL. PROV. PROVINCE Data source:aafc

4 Hog price C$/1kg Carcass Weights and Pork Production: The average carcass weight of hogs slaughtered in the province increased from 9.4 kg in 24 to about 95 kg (equivalent to 119 kg or 262 lb of live hog) in 212. An estimated record 528 million kg of pork and pork products (carcass weight) were produced in the province in 212, up by 34% from about 393 million kg in 26. Trade: As Manitobans consumed only 4-5% of the total pork (retail weight) produced by slaughter plants in the province in 211 and about 3-4% of the estimated total Manitoba-origin pork equivalent (including exported pigs converted to finished pork retail weight) sold in 211, most of the pigs and pork produced in Manitoba had to be sold to other provinces or countries. Manitoba is the largest pig-exporting province in Canada with close to 62% of national pig exports in 211. Due mainly to the introduction of mcool in the United States on September 3, 28, Canadian pig exports declined from a record 1.3 million head in 27 to 5.82 million head in 211, a drop of 42.%. The value of pig exports fell from $46. million in 27 to $226. million in 211. Manitoba is the third-largest pork exporter after Quebec and Ontario In 211, record Manitoba pork and pork product exports of million kg, valued at $643.4 million, were shipped to 26 countries with Japan being Manitoba s MANITOBA PIGS*/PORK: DESTINATION AND PERCENTAGE OF TOTAL PIG* SALES, 28, 211 UNITED STATES (NET) 61.6% largest and most lucrative pork market by far. More than 45% of Manitoba pork exports (by value) and 32% (by weight) went to Japan in 211 with almost 13% going to South Korea and over 1% to China (excl. Hong Kong). It appears that close to half of the pork (by retail weight) produced by Manitoba plants in 211was shipped to other provinces, such as Ontario. MANITOBA 3.4% 28 OTHER PROVINCES (NET) 15.6% OTHER COUNTRIES 5.3% JAPAN 7.9% S. KOREA 2.1% MEXICO 3.1% CHINA 1.% MANITOBA 3.4% OTHER PROVINCES (NET) 16.2% UNITED STATES (NET) 47.7% JAPAN 12.1% 211 MEXICO 5.2% CHINA 5.5% S. KOREA 5.% OTHER COUNTRIES 4.9% * Manitoba-origin, pork and all pigs exported live converted to retail weight equivalent MANITOBA PIG AND PORK EXPORTS TO OTHER COUNTRIES, P Live Pigs Pork and Pork Products '1 '2 '3 '4 '5 '6 '7 '8 ' P Datasource: Statistics Canada, AAFC Prices and Profit: World pork demand, demand for pigs and pork in the United States and the Canada-U.S. exchange rate are major factors in pig price determination in Manitoba. Due to its proximity, the United States is Manitoba s largest market for pigs and is a major competitor in foreign pork markets. The average Manitoba slaughter hog price in 212 was close to $17/1kg compared to more than $172/1kg in 211. The average price in 212 was 15% below the record price set in Data source: MAFRI, AAFC MANITOBA INDEX 1 HOG PRICE BY MONTH, y = -.345x Janet Honey January 213 4

5 PIG INDUSTRY STATISTICS R P PIG FARMS (inc. non-commercial): 1,29 1,18 1, (farms, 51+% of income from hogs): Average no. of pigs per farm on July 1 2,279 2,525 2,695 2,989 3,48 4,433 4,863 5,26 PIGS ON FARMS ON JULY 1: Sows and bred gilts ( ) % of Canada Boars ( ) Market pigs ( ) 2,569. 2,67. 2,63.6 2, , ,49.4 2, ,573.6 Total pigs ( ) 2,94. 2,98. 3,5. 2,84. 2,675. 2,815. 2,845. 2,89. % of Canada PIG PRODUCTION ('): 8,97 9,1 9,45 9,15 8,85 8, 8,5 8,2 % of Canada Annual production change %: VALUE OF PIG PROD. ($ million): PIG CASH RECEIPTS* ($ million): % of Canada *(minus levies,sl. error) NET MARKET INCOME/FARM ($ ) N/A NET WORTH ($ ): 2, ,56.6 2, , , ,698.7 N/A N/A PIG PRICES: Average All-in hog ($/1kg): Average Index 1 hog ($/1kg): Average pig: under 7 kg ($/pig): Average pig: 7 up to 23 kg ($/pig): Average pig: 23 up to 5 kg ($/pig): HOG SLAUGHTER: Inspected slaughter in Manitoba (') 4, , , ,86.8 5, , ,368. 5,572 % of Canada Mb-origin slaughter in Canada (') 3, , , , , , , ,358 % of Canada Average carcass weight (kg): PORK PROD: (million kg carcass) EXPORTS: Total Pigs <5kg - ( ) 3,634. 4,66.4 4, , , ,42.4 3, ,3 - ($ million) Pigs <7kg - ( ) 2,57.7 2,41.8 2, , ,32.3 2,63.3 2, ,25 - ($ million) Pigs 7 to <23kg - ( ) ($ million) Pigs 23 to <5kg - ( ) 1, , , , ($ million) Hogs 5+kg - ( ) 1,38.2 1, , , ($ million) Pork/products** - (million kg) ($ million) ** includes pig fat IMPORTS: Pigs - ($ million) Pork and products - ($ million) CANADIAN CONSUMPTION: Pork (carcass wt. kg/person) R

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