The Director of Risk Management with h@ms Marketing Services says the normal gradual seasonal increase in hog supplies over the next three months can be expected to negatively impact live hog prices.
North American live hog prices can be expected to face downward pressure as slaughter hog numbers cycle higher.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says right now wholesale pork prices are the most dominant factor in the markets.
We’ve seen good solid demand, both from a domestic standpoint and an export market standpoint but keep in mind this is typically the tightest time frame of the year. That means the U.S. weekly production numbers have pretty much hit bottom so we should have no trouble finding places to sell pork and the question really is at what price?
Some of the key issues that we’re having on the demand side is a lack of interest from China. Chinese exports from the U.S. were down about 40 percent from last year but thankfully markets like Mexico and Japan are performing extremely well.
Mexico is consuming significantly higher volumes than what they were a year ago and Japan is still paying significant premiums over what they were a year ago so the combination of those two still puts us in good stead on the export front.
On the domestic side, the domestic consumer I think is choosing pork because of its value proposition. You compare pork to really any beef product and it comes in far less expensive. I think that continues to have a pretty strong influence on the market.
~ Tyler Fulton, h@ms Marketing Services
Fulton acknowledges we can expect to see a gradual increase in hog numbers, by close to 12 to 15 percent, over the next three months or so and that will likely have a pretty negative impact on hog prices.
