There were no real surprises in USDA’s March Hogs and Pigs report. The report suggests there will be fairly large marketings for the remainder of the year, but strong demand for pork should drive prices higher as the year continues, says Glenn Grimes, University of Missouri agricultural economist.

Provided the “unbeleivable” demand continues and prices get the usual seasonal rally, prices for live hogs could be $50s by June with carcass prices in the $70-range, says Grimes.

The expectations are for hog slaughter to be higher this year than last year, which was only slightly less than hog slaughter in 1998. Still, there are no packing capacity issues expected, unless slaughter is significantly over last year’s levels or if a plant is shut down for any length of time.

Another big factor in the prices in the United States has been the hogs and pork from Canada. The flow of Canadian pork and market hogs to the United States really picked up steam in the second and third quarter of last year, after the bovine spongiform encephalopathy case in Canada meant Canadian pork had to battle cheap beef domestically. Throw in a couple plant closures and a lot more market hogs and pork were coming to the U.S.

Victor Aideyan, Farms.com, says that situation may soon change. The slaughter capacity issues have largely been resolved with the Spring Hill slaughter plant back up and the DeBreton plant will soon be back up after the fire. Aideyan thinks there will be a sharp reduction of exports to the United States.

With unfavorable exchange rates having an effect on packer receipts the Canadian pork industry has had a rough eight months. Aideyan says that Canadian market hogs coming to the United States might be reduced as early as the second quarter Canadian hogs and pigs report. Aideyan adds we may see a reduction in the Canadian breeding herd by 2004 or 2005, because the industry has really been bitten in the last few months. It should be noted that the Canadian breeding herd has been steadily growing since the late 1990s and not even the 1998 price disaster forced liquidation of the Canadian breeding herd.