Last week the United States and Canadian Hogs and Pigs report was released as a joint effort from USDA’s National Agricultural Statistics Service and Statistics Canada. The report showed some alarming news, as the Canadian breeding herd increased by 2 percent, causing the combined North American breeding herd to remain steady.

The previous combined report released in October of 2004 indicated the growth in the Canadian breeding herd had subsided, but the breeding herd grew again in the January report. The U.S. breeding herd was down 1 percent in December 2004, compared to December 2003.

“The report was a little bearish, which is discouraging,” says Ron Plain, University of Missouri, agricultural economist. “The October report indicated the Canadian breeding herd had leveled off a little, but it looks like the idea of expansion was too attractive for the Canadians.”

In addition, both the U.S. and Canadian producer continue to improve productivity. This means that fewer sows can  maintain current production levels, and that a greater decrease in the breeding herd is needed to affect production levels.

Canadian live hog exports to the United States remained strong setting another record in 2004, with just over 8.5 million hogs coming south to the United States last year. This is somewhat surprising as the U.S. dollar continues to weaken against the Canadian dollar. However, any effects from the weakening U.S. currency have yet to be felt on the North American pork market.

The combined total inventories for both countries in December 2004 came in at 75.176 million head, which was up about 100,000 pigs from December 2003.

Both countries have experienced high numbers of hogs slaughtered in recent weeks. The good news is the high slaughter runs haven’t put undue pressure of packing capacity, which is better able to handle large slaughters than in the past.