The Director of Risk Management with HAMS Marketing Services says, in spite of exceptionally high feed costs, 2022 was among the top three year most profitable years for North American pork producers over the past decade and similar trends appear to be developing heading into 2023.
Health challenges in the U.S. swine herd which put pressure on hog supplies last year resulted in strong prices.
Tyler Fulton, the Director of Risk Management with HAMS Marketing Service, says unequivocally we could characterize 2022 as being a good year all around.
There was some risk associated with feed prices but overall, I think profitability wise it would be among the top three in the last decade for sure, which is obviously what we would like to see consistently.
As far as the futures go, I think the biggest thing probably was the constrained supply as a result of some of the health challenges in the U.S. herd but nothing changing the dynamics of the market so significantly that we didn’t see normal seasonal trends. They were just seasonal trends at higher levels.
Probably important to note was a bit of a shift in our export flows. We saw a significant reduction in the flows to China as compared to the year previous but, on the flip side, Mexico really stepped up and started purchasing more product to make up for some of those deficits going to China and Asia at large. So overall I think it was a fairly typical marketing year but at elevated prices.
~ Tyler Fulton, HAMS Marketing Services
Fulton acknowledges, by the time we get through the summer months and into the latter half of this year, we could start to see a recovery in U.S. hog numbers by the fourth quarter and with that a little bit more price pressure. However, overall, he is confident 2023 will be a pretty good year.
