Farmscape for October 24, 2019
HAMS Marketing services says, despite unprecedented growth in North American hog production, there's good potential for further upside movement on the 2020 hog market but prices will remain volatile.
In response to steadily increasing Chinese purchases of American pork over the past three to four weeks the futures have seen a five to ten percent upward move over the last week or so.
Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, says there's generally a lot of optimism and for good reason.
Clip-Tyler Fulton-HAMS Marketing Services:
Our supply situation is following up with a trend that developed earlier in the year, consistently better than five percent larger numbers as compared to last year.
To put that in context we never really saw much more than a three percent growth year over year for any number over the last four years and so we're darn close to double the average growth.
Normally this time of year that would be a big concern and we are seeing easily the biggest weekly hog slaughters than we've ever seen before.
But we have the capacity for it and it appears the timing of it is coming when maybe some of the pork might start moving offshore and we won't see the quite the same downward pressure that you might expect with five to six percent more hogs on the ground.
Fulton says, when you've got such a massive hole in production in Asia as a result of African swine Fever, that bodes well for North American pork prices but, that's all contingent on that pork being able to move and North America not breaking with the disease.
He acknowledges there is still a lot of uncertainty so we can expect a high level of volatility because there are no guarantees.
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