The Director of Risk Management with h@ms Marketing Services says hog markets remain very dynamic and unpredictable.
Large hog supplies and tariffs on U.S. pork have driven down live hog prices earlier in the season than normal.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says while U.S. cash prices have rebounded by about 10 percent over the past two weeks, the past three months have seen prices cut in half.
Hog supply and pork production is probably the primary factor that have driven prices lower. In general there’s just a lot more pork out there than what we’ve seen in years and when there’s a heavy supply and constraints to the demand side, coming largely in the form of tariffs on U.S. pork exports, that has driven the market to its lowest levels that we’ve seen in years. It’s those combinations of things.
I think that the cash market really started to respond when the pork buyers became quite aware that there wasn’t any great potential of a serious upside to the market so they just simply started delaying their purchases as much as they could and that perpetuated the problem of moving the price lower. When buyers step away that’s the effect that it has.
~ Tyler Fulton, h@ms Marketing Services
Fulton says there are several factors at play that can move the market in a hurry, including Hurricane Florence that’s expected to hit the U.S, east coast and the development of African Swine Fever in China.
He recommends taking opportunities to hedge in the near term but holding off hedging decisions further out.
