Farmscape for May 31, 2019
HAMS Marketing Services says uncertainty over the potential impact of African Swine Fever on pork supplies and the ongoing U.S. trade war with China has resulted sky rocketing volatility in the North American hog market.
Live hog prices have been extremely unpredictable this spring.
Tyler Fulton the Director of Risk Management with HAMS Marketing Services, says we've seen the most volatile hog markets in 20 years.
Clip-Tyler Fulton-HAMS Marketing Services:
It largely comes from the effect that African Swine Fever has on the North American Market Place, or at least speculation of its effect and, for that matter, any of the trade discussions that are ongoing with the U.S. and China.
That all would have an impact on the amount of pork that could move.
I don't think there's any doubt that the disease across Asia, as it spreads, will have a significant impact on world pork prices but it's still uncertain as to exactly how it will impact them.
That's why the market has been dealing with very high highs and then sharp pull backs.
We're down sharply from where the highs were just a month ago and it's kind of to be expected when we see this type of volatility.
You spend a very short period of time at the very highest level.
I would say that producers should be looking at adding price protection when we start to see some opportunities with respect to prices level.
By that I'm saying an improvement of at least 15 to 20 per cent from where our current levels are and focus on that longer term, so into 2020 to secure some of that good profitability out that far.
Fulton acknowledges, for this time of year, the North American hog supply is the largest we've ever seen.
He says, if the hog supply wasn't as large, the market would be a little bit more willing to maintain levels in the upper end of the trading range.
For Farmscape.Ca, I'm Bruce Cochrane.
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