Farmscape for March 17, 2020
Despite the current market disruptions resulting from the global reaction to COVID-19, HAMS Marketing Services recommends staying the course on existing marketing strategies.
The one overwhelming factor influencing hog markets right now is the impact of actions to halt the spread of COVID-19 on demand for pork.
Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, says the market is extremely uncertain about where pork demand will move but we know there's a massive hole in supplies in Asia due to African Swine Fever that can be filled if logistics line up.
Clip-Tyler Fulton-HAMS Marketing Services:
There's a great deal of uncertainty associated with the demand considerations but we know that the normal course of life in North American and around the world is being disrupted.
We won't really know what the implications are on the demand side of the equation for months so the best that I think the industry can do is operate on a basis of effectively doing the same that they've done.
I think the market will clear as long as there's no logistical bottlenecks because there's a major price differential between Asia and North America.
To characterise demand for North American product, I would say it's still excellent but we don't really know how COVID-19 and the actions being taken to reduce its spread, how that's going to affect pork markets specifically.
Up until about ten days ago the hog markets were very resilient.
We were getting good positive information from solid exports to China but what we started to see is, when it became apparent that the COVID-19 implications could have an impact on logistics, that's when we really started to see the hog markets start to turn lower.
That said, Fulton points out, the hog market has remained among the more resilient markets.
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