The 2026 FCC Food and Beverage Report states sales among food and beverage manufacturers are predicted to rise by 0.8 per cent while volumes fall by 0.7 per cent, the fourth straight year of decline. It notes sales growth will likely be driven by higher prices, not higher consumption.

WHY IT MATTERS: With trade tensions still disrupting global supply, prices could fluctuate this year, affecting consumers’ choices.

FCC chief economist Craig Johnston said this disparity speaks to the issue of consumer purchasing power.

“Higher food prices over the past several years are really weighing on households’ budgets,” he said in an interview. “They’re making more cost-conscious decisions.”

“This is actually a headwind for consumption and a headwind for volumes.”

He said any upstream changes will no doubt filter down to Canadian producers. Some challenges are shared across sectors.

“When we think about common elements, you can think about the tariffs, the elevated input costs, generally,” he said.

Margins are tight across the sector, including for farmers.

“We’re not seeing massive improvements on margins within the food and beverage manufacturing sector to pre-COVID levels, and we’re not necessarily seeing that filter through to a broad-based increase in margins for primary ag.”

“The industry in general is still going through this adjustment period” he said, “and we do expect that to continue to 2026.”

Trade tensions still a factor

Canada will continue to grapple with trade uncertainty this year, including the recent instability caused by the conflict in the Middle East.

Forecasts for costs of goods in the Food and Beverage Report were made before the crisis, “meaning that if the commodity price surge persists beyond just a few months, there would be upside risks to those estimates.”

FCC had expected pressures on some inputs, such as cattle and hogs, to ease from 2025 highs, but surging energy prices due to the conflict make that less likely.

Costs of production up

Production costs for food and beverage manufacturers increased by two per cent in 2025, driven mostly by raw material costs.

“The increase in raw material costs was driven by disruptions that constrained availability and raised prices,” the report states.

“Some examples from 2025 include avian influenza impacts on poultry … tariffs that increased the cost of imported aluminum packaging and historically low cattle herd sizes across North America.”

Costs across sectors

The report also breaks down costs associated with sub-sectors of food and beverage processing.

In grain and oilseed milling, sales were uneven in 2025 but improved by the fourth quarter. 2026 shows signs of a rebound in sales and volumes.

Large carryover of canola stocks is expected to keep prices under pressure in 2026. Canola prices are expected to fall by 3.1 per cent in 2026.

The report suggested demand for Canadian maple syrup and honey has continued to increase in the global market.

In the dairy sector, 2026 will likely see a 3.6 per cent increase of product manufacturing sales over 2025. Processors are also expected to pass along costs from the producer price increase for unprocessed milk to consumers.

In the meat manufacturing sector, FCC forecasts sales up 1.6 per cent and volumes down by 5.6 per cent.

Tight supplies of live animals, due largely to disease outbreaks, drove prices up in 2025. According to the report, “2026 will likely see another year where price, not volume, drives sales upward.”

The post Food and beverage sales growth, volume decline predicted for 2026 appeared first on Canadian Cattlemen.

“No one will be spared the change in market pressures,” wrote Pam Lewison, director for the Washington Policy Center Initiative on Agriculture in a November policy brief.

“What those market pressures do to the overall higher cost of pork, however, won’t be known until the next marketing cycle after implementation,” she added.

Proposition 12, or “Prop 12,” was a California ballot initiative, passed in 2018. It said that meat and eggs could not be sold in California unless they came from animals raised in compliance with the state’s welfare regulations.

This includes foods imported into the state.

While egg and veal producers quickly fell in line, the policy brief said, pork producers—of which 99 per cent live outside California—challenged the law. This included taking the battle to the U.S. Supreme Court, which ultimately upheld Prop 12.

Pork distributors have until the New Year to submit third-party certification of compliance.

According to the brief, the hog industry estimates that the cost of retrofitting penning to comply with Prop 12 will be about USD $3,500 per sow. Proposition 12 specifies that each breeding sow much have at least 24 square feet of space, and have enough space to turn around, extend limbs, etc.

“For an average hog farm of 1,000 pigs, that represents a cost of $3.5 million,” Lewison wrote.

This with a projected average net cash hog farm income of $330,000 in 2023—down 28 per cent from 2022.

Pork producers have struggled this year with high costs in the midst of lowering demand and hog prices.

“Given the downturn in net income, the stark choice facing many small- to medium-sized farm owners may be to sell to larger farms,” Lewison said. “Consolidation in the meat production industry has long been a source of concern for producers, consumers, and even lawmakers.”

“Certainly, pork will become more expensive as both supply constricts and the actual cost of compliance is revealed,” she added.

Canadian concerns

The Canadian hog sector has been eyeing Prop 12 with concern. Canadian producers exported nearly 6.7 million hogs to the U.S. in 2022, including millions of weanlings.

The fear is that if Canada’s national swine housing standards don’t meet California’s regulations, American producers and processors may not want to purchase Canadian animals. However, there has been little clarity as to what the actual effects of Prop 12 will be for Canadians producers.

Also of concern is other states that have similar animal welfare laws in the works.

“We don’t negotiate separate trade agreements with 50 states. We need to be able to have a North American market that’s integrated, allows for the free flow of product and isn’t different in every different state,” said Manitoba Pork Council general manager Cam Dahl in a June interview with the Manitoba Co-operator.

The Canadian Pork Council has said its sees Prop 12 and similar laws as akin to non-tariff trade barriers and has pressed the Canadian government to take up the issue with the U.S.

In late September, the Canadian government told the Manitoba Co-operator it was analyzing the situation and, “considering the U.S.’ obligations under the World Trade Organization (WTO) and Canada-U.S.-Mexico Agreement (CUSMA).”

—Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

The post Smaller U.S. swine herd likely as Prop 12 takes effect, think tank says  appeared first on Canadian Cattlemen.

Nearly a year later, the industry is in the middle of a speedy recovery.

At the Chicago Mercantile Exchange (CME) on Thursday, lean hog futures were either approaching or have surpassed the US$100/cwt mark, levels which haven’t been seen since October 2014.

Brad Marceniuk, a Saskatoon-based livestock economist for the government of Saskatchewan, said there are major drivers right now behind the rise in hog prices.

“Domestic markets typically get stronger into spring and summer with barbecue season increasing demand. We have also had reduced U.S. hog slaughter numbers overall the last few weeks which has reduced pork supply,” he said via email.

“Last spring, the pandemic forced many U.S. hog slaughter plants to slow down, some temporarily closing, which reduced weekly pork supplies for many weeks, reducing U.S. pork in cold storage. Previous pork in cold storage levels have not regained to pre-pandemic levels.”

One of the major drivers is China, as it continues to rebuild its hog herd decimated by African swine fever. Last winter, there were reports China was steadily growing its herd and reducing its overseas hog purchases. Now, they are starting back up again.

“Over the last few weeks there have been reports that China is again struggling to deal with African swine fever and have been forced to kill millions of pigs. This news has likely helped the lean hogs futures contracts to move higher in anticipation of higher pork exports,” Marceniuk said.

Canadian and U.S. hog markets are thriving and, despite rising feed prices taking a bite out of profits, slaughter-weight hog prices are now 60 per cent higher than the low levels seen last July, according to Marceniuk.

“I expect hog prices over the next few months to continue to be strong. We’re at the time of year where seasonal demand is stronger…If (China’s) demand picks up again, we could see a bump up in prices higher,” he added.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

The post Hog market recovering from pandemic lows appeared first on Canadian Cattlemen.

However, strong global demand has propped up hog prices in recent weeks, with cash prices increasing by over 25 per cent.

Fewer hogs coming to market, coupled with strong export demand, were the main reasons behind the strength in prices, according to Brad Marceniuk, Saskatchewan’s provincial livestock economist in Saskatoon.

“Typically we see more hogs come to market, but this year we’re seeing fewer,” he said.

Recent data from the U.S. Department of Agriculture (USDA) indicated inventories of pigs between 120 and 179 lbs. has increased by over six per cent year over year, and pigs 180 lbs. and heavier have increased by nearly 10 per cent.

“Prices depend if hogs come to market,” Marceniuk said, noting the USDA Hogs and Pigs Report published in September also showed recent slaughter numbers have been down by nearly four per cent.

As of early September, hog slaughter prices had rallied by over 25 per cent compared to earlier in the year. U.S. cash hog prices as of Sept. 25 averaged US$64.70 per hundredweight, up by over US$3/cwt or 6.1 per cent from the prior week’s prices.

In Canada, hog prices were around $175.58 per hundred kg on Sept. 25, up by over $13/ckg on the week.

The COVID-19 pandemic has caused many meat processing plants to shutter due to outbreaks and lack of physical distancing, causing backlogs in the meat supply chain.

“With hogs marketed every week on a regular basis, lower slaughter capacity would result in hogs getting backed up on farms,” he said.

Increased global export demand has also been supportive of North American hog prices. African swine fever (ASF) decimated China’s hog population in 2019, reducing it by about 40 per cent. Germany, previously one of the top exporters of pork to China, has also been hit by ASF, causing China to look elsewhere for its pork products.

Marceniuk expected short-term prices to pull back slightly, then move higher in early 2021, barring significant outbreaks of COVID-19 in meatpacking facilities.

“Expect prices moving higher in early 2021, as long as demand stays strong, and COVID-19 doesn’t affect slaughter capacity at plants again,” he said.

“Any outbreaks causing new plant closures would reduce hog slaughter capacity and be negative for hog prices.”

— Marlo Glass reports for MarketsFarm from Winnipeg.

The post Strong demand, lower supplies support North American hog prices appeared first on Canadian Cattlemen.

“We expect pork values to move higher, due to the shortness of production in China,” said Brad Marceniuk, a Saskatchewan provincial livestock economist in Saskatoon.

An outbreak of African swine fever earlier in the summer reduced China’s pork production by over 35 per cent, and lowered the global pork production rate by about 15 per cent.

North American hog prices have been low due to seasonally high slaughter numbers. Typically, when the hog supply to slaughter markets is high, prices are driven lower as pork must be stored rather than shipped.

However, due to the boost in foreign export demand, pork cutout prices have provided pork manufacturers with “a large packer margin.”

For the week ending Saturday, pork cutout values averaged US$81.58/cwt. That’s a 13.6 per cent increase per hundredweight. when compared to the same week in 2018.

“Everyone takes their share of profit during certain times of the year, and this is the time where packers are taking their share of the profit,” Marceniuk said.

The U.S. exported 181,534 tonnes of pork in October, nearly a 12 per cent increase from the previous month. Marceniuk believed North American trade relations with China, which have been invariably rocky for most of 2019, will benefit from the substantial hit to China’s pork production.

“China is the largest producer and consumer of pork in the world,” he said.

“African swine fever is forcing them to import more pork from everywhere, as well as more beef and more chicken.”

— Marlo Glass reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

The post Strong foreign demand boosts North American hog markets appeared first on Canadian Cattlemen.

“It feels like we’re in a bit of a transition time,” said Tyler Fulton, director of risk management with Hams Marketing Services in Winnipeg. He noted that prices saw a sharp drop in August, before recovering in September and then holding steady through October. He described that activity as a “reversal of the normal seasonal trend,” due in part to broader market uncertainty that stems from the trade war between the U.S. and China.

The U.S. hog slaughter has been climbing recently, taking pork production in the country to record high levels. Those heavy supplies are weighing on prices, according to Fulton.

For local producers, “we’re probably right on the cusp of where some guys are profitable and some guys are not profitable,” said Fulton. He said feed costs were also cutting into profits in some cases. While soybean prices have hit their lowest levels in years; that weakness has not yet transferred to softer soymeal prices.

“There too, we may be on the cusp of a change in the trend,” said Fulton.

The fourth quarter is often a struggle to stay in the black, “but longer term, the prospects look very good,” said Fulton, pointing to the premium in the deferred futures over the current cash market.

The U.S. futures are pointing to strong hog prices for 2019, with concerns that African swine fever in China will cut into their pork production, according to Fulton. A reduction in China would swing more demand to North American pork, and underpin prices.

The post Hog market in transition, low prices now to improve later appeared first on Canadian Cattlemen.

Cattle futures were only slightly lower on the Chicago Mercantile Exchange, staying within the narrow range that has defined the trade for weeks.

CME December hogs, the most active contract, declined 0.975 cents to settle at 56.575 cents/lb., declining for the second straight session (all figures US$).

Thinly traded October hogs were 0.3 cent higher, to 68.75 cents/lb. The front-month contract finished just below its roughly seven-month high notched on Monday.

Strong cash hog prices and an increased U.S. hog slaughter have bolstered hog futures in the near-term even as an outlook for increased supplies pressured deferred contracts. The October-December hog spread at an October premium of 12.175 cents was the widest in four years, Refinitiv Eikon data showed.

“It’s evident watching from October to December that traders do not expect this relative tightness in the slaughter hogs is going to last,” said independent futures trader Dan Norcini.

Hogs in the top Iowa and Minnesota cash market were up 33 cents to $65.25/cwt, U.S. Department of Agriculture data showed, reflecting good demand from pork packers.

USDA late in September showed the total U.S. hog herd about three per cent larger than a year ago.

“We should not be running into any shortage of hogs,” Norcini added.

Most-active CME December live cattle eased 0.825 cent to 113.35 cents/lb., declining from an earlier seven-month high of 114.475 cents.

The contract has been trading in a roughly two-cent range since Sept. 27, with traders reconciling satisfactory cattle supplies with robust demand for beef.

USDA data on Tuesday showed U.S. beef exports in August sharply higher than a year ago.

CME November feeder cattle were down 0.925 cents to 157.5 cents/lb. Feeder steers and heifers fetched prices $3-$5/cwt lower than a week ago at a closely watched cash auction in Oklahoma City, USDA said.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago.

The post U.S. livestock: Hog futures slump on ample supplies appeared first on Canadian Cattlemen.

That’s why lenders such as Farm Credit Canada, who show they understand the needs of producers who are dependent on commodity markets, are appreciated, said George Matheson, a hog producer at Stonewall, Man., about 35 km north of Winnipeg.

“It’s good to see the support like that from the lending community — that they’re sensitive to the situation that hog producers are in,” he said.

Although hog prices have recovered somewhat recently, he said many operators are still a long way from being able to generate profits.

He said he shipped a load of 100 hogs during the last two weeks and considered it a big win to get break-even prices.

“But two to three weeks ago, I was looking at probably losing in the neighbourhood of probably $35 per hog.”

He said he’s not sure what’s sparking the recent rebound, but doubts it is a long-term phenomenon, with a huge oversupply situation in the United States.

To help alleviate financial stress, FCC announced Tuesday it will offer more lenient repayment terms on loans for hog producers caught up in the recent price crash, caused by international trade disputes.

Barry Watson, FCC’s acting senior vice-president for the Prairie region, said the federal ag lender would work with hog producers facing financial difficulties to come up with solutions. That could mean deferred principal payments or adjustments to loan repayment schedules.

Oversupply in the U.S. has caused drastic and abrupt hog price declines in Canada, he said. Canada bases its hog prices on the Chicago Mercantile Exchange.

“In Canada here, it has probably had a 30 per cent negative impact on our pork prices, at least in the recent past and it’s likely that the months ahead are going to be tougher slogging as well,” said Watson.

To explain the reasons behind the skid in hog prices, one needs to look at protectionist policies in the U.S., which led to both China and Mexico applying tariffs to U.S. pork, in retaliation for U.S. tariffs on their goods.

China has levied a 62 per cent tariff on American pork; Mexico has applied a 20 per cent tariff. Those tariffs have significantly curtailed U.S. pork exports, even as U.S. producers show no signs of reducing production.

Matheson admitted he’s unsure about the technical reasons behind the market’s sudden resurgence, albeit temporary, but added that sometimes reason has nothing to do with it.

“I wonder if fear of African Swine fever is putting some emotion into the equation. I’m not sure.”

ASF has been spreading through China, where 29 outbreaks have been reported since Aug. 3, leading to almost 40,000 animals being culled.

The disease recently has spread to Western Europe, where it was found in Belgium. As of Sept. 25, eight cases were confirmed there.

Worldwide, ASF has infected more than 360,000 pigs and wild boars in 2018, counting only those that have been reported to the World Organization for Animal Health. It is believed to have been transmitted to Eurasia from Africa in 2007.

The disease can kill infected animals within 10 days. Once it is detected on a farm, the entire pig herd on that farm must be destroyed. It is not, however, a human-health risk.

Whatever the cause of the turnaround in prices, Matheson said it helps. “I’m not quite sure myself what the cause of that rebound is, but we’re glad to see it.”

His recent hog shipment earned him an average of $157 per animal, he said. “So it’s not great, but considering the time of year and what was forecast at one time, I’ll take it, that’s for sure.”

But the price still falls short of where he thinks producers need to be to earn a reasonable living. “Considering inflation in this day and age, I would say if a producer could average $200 (over a year) for a hog, considering feed costs, labour costs, construction costs, I think most producers would say they could live on that.

“But we’re a long ways below that.”

FCC’s Watson said the key is for struggling producers in any sector to reach out to their lending institutions to explore possible assistance.

He also noted risk management tools producers can use to their advantage; forward contracts and hedging programs, for example, can smooth out bumps in the market.

FCC is also monitoring the current grain situation, he said. Untimely harvest precipitation has delayed harvest across large parts of the Prairies, especially in central and northern areas of the grain belt. But at least for now, there is still time for farmers to get the crop in, he said.

Federal Agriculture Minister Lawrence MacAulay’s office said in an emailed response that the federal government wants to reassure farmers that programs exist to help them manage the potential impacts caused by current low prices.

Farmers can draw on AgriInvest account balances, and those enrolled in AgriStability may qualify for support under that program.

AgriStability offers assistance for income losses of at least 30 per cent from a producer’s historical reference margin. Up to 70 per cent of losses greater than 30 per cent are covered.

As well, cash advances of up to $400,000 are available through the Advance Payments Program. The first $100,000 is interest-free, MacAulay’s office stated.

— Terry Fries writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

The post Hog producers continue struggle toward profitability appeared first on Canadian Cattlemen.

Weekly signature No. 5 base slaughter weight cash hog prices averaged $117.83 per 100 kg as of Friday, up by roughly $15 over the past two weeks.

Those numbers are a stark departure from the previous month, according to provincial livestock economist Brad Marceniuk in Saskatoon. “During the month of August we saw a big drop in hog slaughter prices, down 35 per cent or more.”

China and Mexico’s decisions to slap tariffs on imports of pork from the U.S. weighed down Canadian prices in August, he added.

Mexico announced it would lower its penalties after it reached a deal with the U.S. over the North American Free Trade Agreement.

“So there’s a variety of reasons, but some of the trade issues are starting to wane,” he said.

As well, the emergence of African swine fever in China has led to ideas that country may be forced to import more pork than it normally does.

“China produces 50 per cent of the pork in the world,” he said.

Chinese pork imports typically tend to be inconsistent, he said, but there are fears the current outbreak could get worse, which is one reason why prices are on the rise.

“Prices are still very weak overall but stronger than they were two weeks ago,” he explained.

Another factor impacting the market is the increasing spread between the wholesale pork cutout value and the cash price paid for hogs.

“We may continue to see some rebounds but I think prices will remain weak in the fourth quarter and likely below production costs,” he said.

— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

The post Canadian hog prices on rebound appeared first on Canadian Cattlemen.

In Canada, the formula price used by domestic farmers is based on the national base price in the U.S. That price is determined by a formula used to calculate values in a number of key U.S. states.

In other words, Canadian prices follow U.S. prices, even if the pork is sold in Canada.

U.S. daily average slaughter weight prices for cash hogs have been dropping lower over the past couple of weeks, and that trend is starting to be felt here.

The Signature No. 5 (Maple Leaf) Index 100 daily price quote for Friday (Aug. 10) in Canada, was down $18.68 per 100 kilograms (ckg), to $146.84/ckg.

According to Andrew Dickson, general manager of the Manitoba Pork Council, it’s a nervous time for the industry.

“Pork is moving but it’s going at a lower price so producers are getting less money,” he said.

Back in January, a Manitoba producer could have locked in a delivery price for the October contract of $154. Today, if you were going to ship that same animal in the same month you’d be lucky to get $123.

“Who knows how much worse it could get?” he said, noting that at the end of July the price for an animal for delivery in December was just $104/ckg.

Dickson said that amount of money wouldn’t even cover the cost of production, which he estimated at $140 or more.

“The feed alone would be $90 to $100,” he said.

Much of the problem can be traced to oversupply, he said. Four to five years ago market opportunities for North American hog farmers looked very promising. As a result more processing facilities were built in anticipation of higher production.

However, that plan seems to have run into a brick wall, as newfound protectionist measures roil world markets.

“With Mr. Trump deciding to renegotiate NAFTA (North American Free Trade Agreement) and pulling out of TPP (Trans-Pacific Partnership) it has upset the apple cart,” said Dickson. “Now how will it be sold?”

China currently regards Canada as a friendly trading partner but Dickson is worried about recent speculation the Canadian government is thinking of putting tariffs on foreign imports of steel and aluminum.

“If we’re importing steel and aluminum from China they’re not going to be happy if we suddenly put tariffs on their products,” he said, adding pork could be one of the products caught in the crossfire.

Dickson said he has talked to counterparts in the U.S. who are equally concerned about the situation.

“Going into this winter, a lot of producers are going to lose money raising pork in the U.S. and, by extension, into Canada.”

— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

The post Trade uncertainty weighs on Manitoba pork prices appeared first on Canadian Cattlemen.