Statistics Canada is reporting that farrowings in the first quarter of 2004 were 8.2% higher than the previous year and farrowing intentions were up 6.4% for the April-June quarter.
Statistics Canada is the Canadian's counterpart to the National Agriculture Statistics Service (NASS), which brings us our quarterly USDA Hogs & Pigs report.
U.S. sow numbers are being cut, Canadian farrowings are on the rise. What's going on here? Are we even using the same measuring stick?
Actually, no, we are not.
NASS issues reports on a seasonal quarter — March, June, September and December. The Canadian reports are issued on a calendar quarter — January, April, July and October. In other words, the Canadian report lags the U.S. report by a month. These staggered pig crop reports send confusing signals and make it difficult to deliver a meaningful composite of the North American pig supply.
Timing of the surveys seems to be the biggest obstacle to effectively blending the reports. If either country agrees to shift the timing of data collection, they will be left with a discontinuous dataset, which will disrupt direct comparisons within the country for a period of time.
Here's an idea — each country could compromise by moving data collection 15 days, forward and back, respectively. I can't imagine that counting sows or pigs 15 days from the traditional time would skew the report substantially. Of course, I'm no statistician, but even veteran hog analyst Glenn Grimes agrees: “It would create problems for a brief period of time for those people that do not want to go through the extra effort to interpolate the data. Within 4-5 years you'd sure have it worked out. It's not that difficult to do.”
If interpolation is needed for a few years — then for goodness sake, let's interpolate!
Fact is, it's unlikely that the flow of Canadian pigs will slow, let alone subside. That said, I think it's high time we figure out a better way to factor them into our production totals.
Grimes boils the situation down to real terms that everyone can understand. USDA reports U.S. productivity has grown at a pace of 3% per year for the last four years; Canadian feeder pigs and market hogs add another 1% productivity growth, annually. In the long term, pork demand is expected to grow at a modest 1.5% per year. With total U.S. production growing at a pace of 4% annually, the supply side obviously needs adjustment.
“That means we need to downsize our sow herd about 2.5% per year to stay in balance,” Grimes adds.
The key words there are “to stay in balance.”
The only way to achieve better balance is to count the same inputs on the same schedule. If the signals don't mesh, chances are producers north and south of the border are winging it or relying on other signals to guide herd expansion and/or culling.
Obviously, simply culling the U.S. sow herd has not brought the desired results. We farrow fewer sows, but get more pigs from them, then feed them to heavier weights — effectively canceling out what I assume was the original intent — to manage supply and become more efficient. If we fail to count the Canadian influx or to consider the expansion or contraction of our northern neighbors, is it any wonder that the market doesn't respond in a predictable way?
The beef industries in both countries apparently recognized this need for balance a few years ago when Statistics Canada and NASS agreed to compile a full cattle industry report twice a year. Luckily for the cattlemen, both countries counted cattle Jan. 1 and July 1. “All they had to do was harmonize the questions and make sure they were being asked the same way,” explains Missouri ag economist Ron Plain.
A U.S.-Canadian biannual hog report could track breeding herd numbers and market hog inventory, perhaps eliminating the weight brackets to avoid the confusion it perpetuates.
It would be a whole lot easier if both countries took the same measurements and reported them at the same time.
“The bottom line is — you've got to try to keep production within the demand growth (1.5% annually),” reiterates senior economist Grimes.
In the meantime, if you're interested in keeping track of what's happening in Canada, check out Statistics Canada's Web site, www.statcan.ca. A simple search with key words “hogs, pigs” will yield more than you probably want to know. Look for the most recent “hog statistics” catalogue number for their current pig crop report. You may also want to subscribe to National Hog Farmer's North American Preview, a weekly e-newsletter, which includes U.S. and Canadian pork production, plus sow and market hog slaughter data. You may subscribe via our Web site, www.nationalhogfarmer.com. It's free!