Hog populations continue to run higher than last year, generally outpacing expectations.

Tyler Fulton, director of risk management with h@ms Marketing Services, says this year's hog supply is about seven per cent higher than last year, with populations coming back from the outbreak of porcine epidemic diahrrea virus (PEDv).

Fulton says hog slaughter is anticipated to increase five to seven per cent over the next eight weeks, which is typical for this time of year.

"When we see a supply increase, the price drops," he says. "That ratio is probably closer to 2-to-1, so if we see a one per cent increase in the hog supply, we could likely see a two to two and half per cent drop in hog prices."

With beef prices dropping and the U.S. chicken inventory increasing, Fulton says hog markets have been doing well, however after October when strong hog supplies typically begin to subside, he says hog prices could start to drop.

"The other consideration here is the Canadian dollar," Fulton adds, "it's now up to the highest level we've seen in several weeks, anyway. When you see the dollar appreciate, that's a direct discount from the prices hog producers are receiving."

Fulton says there would be decent value to producers pricing-in about a quarter of their winter and spring production if they have concerns about the dollar continuing to go up.