Farmscape for December 19, 2017

The Director of Risk Management with h@ms Marketing Services says demand for pork will be a key factor influencing hog markets moving through the first quarter of 2018.
The availability of hogs for slaughter projected by the U.S. Department of Agriculture in its September Hogs and Pigs Report has been running significantly below the those forecasts.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says wholesale pork prices have been holding steady with some variation based on cut so packers have been willing to give what they get so the question in 2018 will be the same as in the last two months of 2017 and that is how does hog supply compare with pork demand.

Clip-Tyler Fulton-h@ms Marketing Services:
It appears as though we've over estimated hog supply and so if we project that forward maybe we're going to reduce the total production that we're looking at which is good because, what we've found is that on the demand side in particular exports have really not been keeping pace with the growth in production.
We've seen great numbers coming from domestic pork demand but mediocre or steady numbers only from the pork export side.
That the question is how well do those two balance up.
If we see a situation where the hog supply starts to really balloon and we're not clearing the market, that generally has price implications, especially in the winter months when we need to be consistently clearing the market of all production.

Fulton says, with the new plants coming on stream in the United States, we might see increased competition for hogs narrowing up packer margins and resulting in a better profit environment than we would otherwise have thought.
For Farmscape.Ca, I'm Bruce Cochrane.

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