Farmscape for June 25, 2015

The director of risk management with h@ms Marketing Services reports continuing strong demand for pork and a weak Canadian dollar has helped cushion Canadian pork producers from the effects of increased numbers of U.S. hogs going to slaughter.
Live hog prices have remained surprisingly stable this spring.
Tyler Fulton, the director of risk management with h@ms Marketing Services, says hog numbers normally start to tighten during the warmer summer months as demand for pork peaks during barbecue season which corresponds with higher prices, but that hasn't happened this year.

Clip-Tyler Fulton-h@ms Marketing Services:
Over the last three weeks the U.S. hog slaughter has been running about 7 to 8 percent larger than 2013 levels.
I really don't think anybody in the industry was really anticipating such a large increase in what has been a relatively short period of time, really over the last six weeks or so.
So, in general, demand has played a positive role but not near enough to offset the bearish factors of the surprisingly large hog supply.
One of the factors that are kind of leading into positive demand influences is the fact that beef prices continue to stay at near record high levels and so, from a consumer standpoint, pork represents really very good value.
But, quite simply, they're not consuming enough to completely offset the negative influences of the heavy supply.

Fulton says the Canadian dollar has had a positive influence on Canadian pork profitability because it has been running at such a deficit to the U.S. dollar.
He explains, because the Canadian industry uses a U.S. pricing point in almost all of it's formula contracts, when there's a weak Canadian dollar it serves to benefit Canadian producers so, if it remains at levels around the 80 to 82 cents that we've been trading at, it's going to favor Canadian producers.
For Farmscape.Ca, I'm Bruce Cochrane.

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