Canada's pig herd is poised to shrink to its lowest for at least a decade this year as farmers quit a sector viewed as suffering its worst-ever financial crisis.

The herd will fall by nearly 700,000 animals as farmers turn to slaughter to in face of losses expected at up to Can$55 an animal this year, a report from US Department of Agriculture foreign staff said.

The number of pigs taken to abbatoir will jump by more than 700,000 to 21.4m head.

At 11.5m head, Canada's pig herd will end this year 22% smaller than at its peak in 2005, and at its smallest since at least 1998, the earliest herd figure readily available to Agrimoney.com.

'Worst financial crisis'

Canada's government has introduced a series of measures, the latest a Can$92m programme last month, to encourage the least-viable producers to quit an industry whose decline analysts have traced initially to 2006, when a clamour for mining resources sent the Canadian dollar soaring.

High feed costs, as grain and oilseed prices soared, and the global recession have further depressed the sector.

"Canadian hog industry leaders report this as the worst financial crisis the industry has witnessed," the US note said.

Manitoba worst affected

Live exports have also been damaged by US country-of-origin labelling regulations, which have discouraged American meat groups from importing Canadian hogs for processing.

"Manitoba's industry has been worst hit due to its level of production of weanlings normally exported to US feeding operations," the briefing added.