The general manager of h@ms Marketing Services is advising pork producers to lock in at least a portion of their production at the current strong prices.
Given the jump in pork values, declining slaughter, huge packer profit margins and lower slaughter weights, short term supply fundamentals look supportive of higher prices.
Bill Alford, the general manager of h@ms Marketing Services, says, while the lower Canadian dollar has meant higher prices in Canada, the effect of the strengthening of the U.S. dollar is something to be watching given they are relying more on exports to determine price and exports are so currency related.
Domestic demand has been steady. There is more competing meats, chicken and beef particularly that are lower than year ago levels as far as prices so we’re competing against the other meats. That’s keeping the top side maybe a bit in check domestically but the export market is being fuelled by Chinese demand and their domestic prices are soaring to record highs.
It’s a bit of a wild card to predict but the market is going to be watching for those exports well into the fall as well. The Chinese domestic hog herd has shrunk to levels never seen in recent times and increased their domestic prices at the retail level to record highs.
Given it’s the most widely consumed meat in that country, double the beef and chicken combined, if they’re short in the market they’re going to be looking to import serious volumes to temper the prices there, given it does fuel inflation. ~ Bill Alford – h@ms marketing Services
Alford advises producers to be watching the hog slaughter numbers.
He says slaughter numbers and hog weights should be coming down seasonally and weights are starting to creep lower but if we see any increase in numbers or weights it’s going to out pressure on hog prices very quickly so he recommends producers lock in at least half of their production at current levels given the strength of the market today.
