The director of risk management with h@ms Marketing Services says the weak Canadian dollar and strong domestic demand for pork are benefiting Canadian hog producers.
The market for live hogs has started to develop a bullish undertone.
Tyler Fulton, the director of risk management with h@ms Marketing Services, says trends are generally following the normal seasonal effect of supplies easing a little bit.
Typically we see the peak in supplies in the fourth quarter of any given year and that’s no different here. So we’ve started to see just slightly more comfortable numbers with respect to the U.S. and so, as a result, packers are paying up a little bit more and the good news is that all evidence kind of suggests that domestic demand is still holding up firm.
It’s not going gangbusters or anything. We’re not making huge gains but, for Canadian hog producers right now, the profitability looks excellent. We’ve now got prices that can be secured at around $200 per CKG in the summer months and average for the year that’s in the neighborhood of around $170 to $175 so, by any measure really, those are very profitable prices, especially in the context of generally steady feed prices. The futures definitely represent a strong premium over the cash market which suggests that there’s reason for optimism for the next several months.
Fulton says the value of the Canadian dollar has been the real game changer for Canadian hog producers.
He says, had the dollar not made its more recent lag, there would have been projected periods of loss in 2016 but the drop to the 70 cent level has put some extra dollars into the pockets and definitely is to the advantage of Canadian hog producers.
