Canadian hog sector set for strong margins in 2026 says FCC

Robust demand for Canadian pork and decrease feed prices appear set to help hog margins in 2026, says Farm Credit score Canada.

The farm lender is forecasting hog costs barely above 2025 figures and nicely above five-year averages, wrote FCC senior economist Justin Shepherd in a Jan. 28 report.

Cattle costs help hogs

Cattle futures set new data in 2025 and proceed to hover close to highs.

“With cattle futures close to document ranges, this supplies help for the hog market as an alternative protein,” Shepherd wrote.

“Demand for hogs is being fueled partially by home hog slaughter that elevated in 2025 after a number of years of consolidation and is predicted to be up barely once more this 12 months.”

Pork costs haven’t risen as rapidly as beef on the grocery retailer, which has made it a extra reasonably priced protein selection for buyers. Since 2022, pork costs have risen by greater than 13 per cent, rooster costs rose by nearly 22 per cent, and beef costs rose by practically 38 per cent.

“That a minimum of partially explains the uptick in pork consumption final 12 months,” Shepherd stated.

Meat costs are anticipated to stay excessive in 2026 based on Canada’s Food Price Report, launched in early December. Report lead Sylvain Charlebois famous that Canada was wanting rooster on the time, which he attributed to excessive beef costs. Nonetheless, he stated he anticipated the poultry sector to get well “ultimately.”

Decrease feed prices enhance margins

Ample feed grain provides are anticipated to carry costs under the 5 12 months common all through 2026, FCC predicted.

Canadian farmers produced record crops in 2025, which is pushing grain and oilseed costs down. Cheap American corn may grow to be aggressive in some areas.

Moreover, massive home provides and commerce restrictions with India are more likely to result in some peas being diverted into the feed market, Shepherd stated.

“Once we add in sturdy hog costs, it suggests Manitoba and Ontario farrow to complete hog margins might attain their highest ranges in 5 years.”

Dangers forward

Shepherd famous that illness is an ever-present risk for Canadian hog farmers. Different components of the world are coping with outbreaks of African swine fever (ASF), porcine epidemic diarrhea (PED) and porcine reproductive and respiratory syndrome (PRRS).

“If Canada can proceed to maintain PED and PRRS underneath management, and hold ASF overseas, producers can really feel optimistic given sturdy hog costs and manageable feed prices,” he stated.

The sector additionally faces potential results of U.S. voluntary nation of origin labelling guidelines, which took impact on Jan. 1. FCC stated stay hog exports to the U.S. look to stay regular for now.

In November, a Manitoba pork marketer stated some U.S. processors had already shut their doors to Canadian pigs. Pigs had been shifting, however it wasn’t at all times straightforward.

The renegotiation of the Canada-U.S.-Mexico commerce settlement (CUSMA) additionally stays a wildcard.

Exports had been additionally down within the first 10 months of 2025 — falling six per cent under the five-year common.

“That is highlighted by the massive drop in shipments to China,” wrote Shepherd.

China imposed a 25 per cent tariff on Canadian pork in early 2025, together with duties on canola, peas and seafood. An agreement between Beijing and Canada has led to tariffs being dropped or eased on these merchandise, however the levy on pork stays.

“Continued success is being discovered, nevertheless, in Japan, Mexico and South Korea the place Canada’s pork exports proceed to develop at a strong tempo,” Shepherd stated. He famous commerce to the U.S. has been “sturdy and secure” 12 months to 12 months.

---

You’ll additionally obtain trade and coverage data, multi function handy e-mail delivered proper to your inbox!

One e-mail delivered 6 days every week for ranchers, feedlots, packers and livestock gross sales operators.