Canada's latest hog-inventory report shows that the swine herd is not growing. As of April 1, there were 1.6 million sows and bred gilts in Canada, fewer than in April 2005. The country's market-hog inventory also was down 2.4 percent. "The smaller swine herd reflects increased pig exports to the U.S., lower hog prices in Canada, problems with porcine circovirus and concern about the future profitability of Canadian hog production," notes Ron Plain, University of Missouri ag economist.

Canadian hog prices track with U.S. hog prices, but the exchange-rate fluctuation keeps price changes from tracking exactly. For example, U.S. barrow and gilt prices in 2005 were 11.9 percent higher than in 2000. For that same period, Manitoba hog prices were 9.1 percent lower.

Canada farrowed 3.4544 million litters in 2005, 1.4 percent fewer than in 2004. That marked the first year-over-year decline since 1996. "It looks like 2006 farrowings may be close to last year's number," notes Plain. So far this year, litters farrowed in Canada are down 1.2 percent (January to March) compared to first-quarter 2005. Farrowing intentions for the second quarter are for 1.2 percent more litters than in April-June 2005, he adds.

Expansion of the U.S. swine herd is being slowed by high construction costs and the permitting process. Little or no growth in the Canadian herd means that the expansion phase of the hog cycle may be much less devastating to prices this time around, concludes Plain.