The general manager of h@ms Marketing Services reports, despite the partial shutdown of U.S. government services, the confidence of North American pork producers in the manner in which live hog prices are determined remains intact.
As a result of the U.S. federal funding stalemate in Congress non-essential U.S. government services including the U.S. Department of Agriculture’s tracking of hog pricing information used by industry to establish live hog prices on a daily basis have been suspended.
In the absence of this information, North American pork processors have adopted a variety of options over the past three weeks to set live hog prices.
h@ms Marketing Services general manager Perry Mohr says the processing industry on both sides of the border has had to scramble to find alternative methods to price hogs.
I think, for a large part because the price hasn’t changed drastically and again I elude to the fact that typically at this time of year the price decreases so producers would normally heading into the third and fourth quarter expect prices to drop but because they’ve sort of held steady (we’ve seen a five dollar drop here in the last few weeks) I don’t think producers are actually lacking confidence so far in the way the price has been established.
Having said that, if the price were to drop eight or nine dollars per hundred kilograms this week, I do believe that that would get producers” attention and there would be a lot more questions asked but right now I believe that producers for the most part feel that alternative methods that have been put in place for this period are somewhat equitable in nature.
Mohr says to ensure the producers it represents get compensated fairly and equitably h@ms Marketing Services is keeping a close eye on market differentials and historical price differentials between the different markets in trying to establish what is a fair value given the information available to work with.
