Many have written about the March 1 Hogs and Pigs report and their interpretation of why the numbers don’t appear to add up. As might be expected from these comments, there remains general confusion as to what is really happening with pig numbers going into the fall months and what the numbers will look like for next year.

I’m in the camp of believing that expansion is occurring. I’m aware of several sow units beyond the planning and permitting stages that will be constructed this summer ranging in size from 1250 sows to 7500 sows. I’m also aware of several projects projected to move dirt in late summer with the goal of population with females 1 year from now.

The other big unknown if the impact of the removal of MCOOL regulations and the weak Canadian dollar on imports of weaned pigs. Pigs already in the US show up in the kept for market inventory but import intentions don’t show up in the farrowing intentions anywhere.

For the past 2 years, we’ve slowly been ramping up our imports of Canadian born pigs. For the week ending March 26, 2016 US producers imported 103,353 pigs weighing 55 kg (110 lb) or less. Almost all of these pigs can be considered to be newly weaned. This is the largest weekly number since the week ending February 13, 2010 when we imported 104,495 pigs in this weight category.

While the removal of MCOOL regulation has been a factor making it easier to import Canadian pigs, a primary driver has been price. The noon exchange rate for the Canadian dollar yesterday (April 5) was $1.3170 to the US dollar. The futures exchange rate for the Canadian dollar though next March remains at $1.31 Canadian per $1 US.

For Canadians selling weaned pigs into the US, this means pigs priced at $48 US delivered return $63.22 Canadian dollars to the seller. The incentive to sell weaned pigs to US producers versus growing them to slaughter in Canada is even stronger when you consider that their base carcass price yesterday was only $54 US dollars. Our quoted base price (LM_HG201) was $65.05.

All of this suggests that we can look for continued growth in Canadian weaned pig imports. Will we get back to levels above 120,000 pigs per week like we had in 2007 and 2008? Only time will tell the answer to that question.