Farmscape for April 27, 2018

In response to anticipated record U.S. slaughter hog production and uncertain export demand for U.S. pork the Director of Risk Management with h@ms Marketing Services is advising pork producers to take action to protect themselves by forward pricing a portion of their planned production.
The hog slaughter over the last six weeks to two months has averaged about three and a half to four percent larger than year ago numbers and that trend is expected to continue suggesting production will consistently outpace last year's levels resulting in a heavy hog supply straight through to the end of the year.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, suggests, while domestic demand for pork remains solid in the United States, the wild card is coming from uncertainty in the export market where the U.S, is renegotiating trade agreements.

Clip-Tyler Fulton-h@ms Marketing Services:
I think the main issue is this increase in hog supply.
By September through December we're going to be looking at easily the largest pork production in U.S. history which comes with some uncharted territory in terms of where that pork consumed and at what price it actually clears the market for.
I think that, especially given the uncertainty on the export demand side, I think that it's prudent for producers to be taking some protection, possibly somewhere between a third and a half of their intended production in the September through December time frame.
Right now the prices actually would offer a marginal profit for many producers and, given the huge production that we anticipate, I think that's a pretty good level to hedge at.

Fulton says when it comes to the pork sector, the Canada U.S. border tends to be open so the connection between the U.S. and Canada remains solid which is why Canadian hog producers largely have long term contracts with packers in Canada that are based off of U.S. pricing points.
For Farmscape.Ca, I'm Bruce Cochrane.

       *Farmscape is a presentation of Sask Pork and Manitoba Pork