2022 Cattle and hog outlook update: Mixed profitability for Canada’s red meat sectors

This is the update to our February 2022 cattle and hog outlook, which follows Q1 updates to our grains, oilseeds and pulses and dairy outlooks.

The Russian invasion of Ukraine has changed the feed cost outlook for 2022, and stronger price volatility will continue for the remainder of the year, challenging profitability.

Cattle prices in 2022 are forecasted to remain at or above 2021, but margins will remain under pressure due to high feed costs (Table 1). Feedlot margins are projected to be negative on average, while cow-calf margins are expected to be near break-even. Improved pasture and forage conditions in Western Canada will be critical for profitability in the cow-calf sector.

Ontario hog prices are projected to be significantly higher than the last few years, but margins are projected to be below the 5-year average due to higher feed costs. Quebec hog prices are subject to a temporary price adjustment based on an agreement between producers and processors. April Quebec hog prices were 13.5% lower compared to Ontario, according to AAFC data.

Quebec processors also agreed to reduce Ontario hog slaughters by 5,000 head per week during this time. High feed costs may also put pressure on feeder hog prices that are not fully captured in the Table 1 forecasts. Manitoba hog prices are forecast to be up significantly in 2022. Margins will be tight overall in the hog sector... Read More