You step on the brakes in your pickup and you come to a stop. In some ways that’s what has happened in Canada in terms of breeding-herd expansion and sow farrowings.

Now that Canada and the United States are releasing combined pig-crop reports each quarter, you have a clear and regular view of what’s going on with your northern neighbors. At least for now, they’ve put the brakes on annual growth that started eight years ago.

Through the first three quarters of 2005, Canada’s producers reduced farrowings just less than 1 percent from 2004 levels. During the fourth quarter of this year, they plan to farrow 3.5 percent fewer sows.

By year’s end, Canada’s pig crop is expected to drop below year-ago levels for the first time since 1993.

The last time that Canadian producers farrowed fewer sows than the previous year was in late 1996. Those numbers were down 1.28 percent from the year before, notes Ron Plain, University of Missouri agricultural economist. “For the next 33 quarters, Canadian farrowings exceeded year-earlier levels. During that stretch, the average farrowing increase was 6.5 percent per year,” he says.

It’s no secret that what happens in Canada impacts U.S. producers, and vice versa.

From 1994 to 2004, 92 percent of the growth in U.S./Canadian pig production occurred in Canada. While the U.S. pig crop grew 1.3 million during that time frame, Canada’s pig crop increased 15.2 million.

Still, Canada’s 33-million-head annual production is a shadow of the United States’ 103 million. Also, during Canada’s dramatic growth spurt, Canadian and U.S. producers developed and expanded business arrangements that involved shipping weaned pigs to the United States. So it wasn’t a one-way street. Between U.S. producers and packers, more than half of that 15.2-million-head growth ends up in the United States.

Despite growing export sales and an extended profitability run for both U.S. and Canadian producers, neither group is signaling more growth. “The number of sows farrowed in the United States and Canada in the second half of 2005 is expected to be a fraction lower than the July-to-December period in 2004,” says Plain. “Thus, the combined U.S./Canadian hog slaughter during the first half of 2006 should be close to that of January to June 2005.”

So why the change in Canada? There are many influencing factors. Producers there have put the brakes on growth because of a weaker U.S. dollar, which dilutes the incentive to ship pigs south. Environmental issues there are a bit stickier than they used to be. Facility costs are higher there just at they are here. Also, both producer groups are more savvy to market signals and needs. Domestic demand for pork is increasingly a concern, and there are growing questions about consumers’ meat saturation point.

What can we expect in 2006?

A significant expansion in hog-slaughter capacity is occurring in Western Canada, says Plain. This may ultimately lead to an expansion in sow numbers in that region, he adds. Those market hogs will remain in Canada. However, the pork likely won’t. In terms of pork from hogs born in Canada, 36.9 percent is consumed there, 38.7 percent is eaten in the United States and 24.4 percent is shipped elsewhere. 

The Canadian breeding herd was up 0.9 percent on Oct. 1. The U.S. breeding herd was up 0.2 percent on Sept. 1, notes Plain. Producers in both countries continue to produce more pigs with fewer sows. Looking ahead, he forecasts U.S. hog slaughter in 2006 to be 1.1 percent greater than this year.

It will be worth watching USDA’s upcoming December pig-crop report to see whether U.S. producers are starting to accelerate.