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Higher U.S. Hog Numbers Expected to Result in Lower Market Hog Prices
Tyler Fulton - HAMS Marketing Services

Farmscape for July 18, 2017

The Director of Risk Management with h@ms Marketing Services says a dramatic increase in U.S. hog numbers will signal a shift to lower market hog prices.
The USDA's Hogs and Pigs Report for the second quarter of 2017 showed an increase in both the U.S. breeding herd and market hog numbers.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, expects this week to signal a turning point from what was a sharply higher market over the past month to softer prices.

Clip-Tyler Fulton-h@ms Marketing Services:
The report pretty much confirmed the idea that market hog numbers were going to increase by roughly four percent over the course of next four months or so and that was pretty much in line with what expectations were.
That four percent increase, that's very large so that explains the big discount that the lean hog futures are trading at from the current cash market.
On the breeding herd side it really just confirmed the belief of the industry in that they anticipated that the herd would grow about one and a half percent and that's pretty much what the USDA pegged it at.
To put it in perspective the average market hog growth on an annual basis was probably about one and a half percent over the last 10 years so this four percent is greater than double what the typical growth is so that's sizable.
It's a decisive move to larger numbers.
It does have consequences directly to Canadian producers because our prices are a function of that U.S. market and consequently we're going to be moving into a time frame of lower prices just by virtue of the abundant supplies that are available across North America.

Fulton says the market isn't likely to collapse but we're at a tipping where the hog numbers are heavy enough where the packers will start to pull back some of their cash bids.
For Farmscape.Ca, I'm Bruce Cochrane.


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