[email protected] Marketing Services Recommends Incremental Forward Pricing Amid Uncertainty over ASF

Farmscape for November 7, 2018

[email protected] Marketing Services is recommending incremental forward pricing targets amid uncertainty over African Swine Fever.
The spread of African Swine Fever remains high on the North American radar.
Tyler Fulton, the Director of Risk Management with [email protected] Marketing Services, says the impact on the market has been somewhat subdued but the issue is the largest source of uncertainty so, while everyone is monitoring the spread of the disease in China and Europe, as of yet it has had a marginal effect on prices.

Clip-Tyler [email protected] Marketing Services:
I think that, in terms of the deferred  months, the spring and summer prices for 2019, are probably being supported by the idea that in the longer term we expect more information and the implications might be positive for North American producers.
But there's still a great deal of uncertainty there.
The latest news suggests that the spread of the disease is far greater than what's actually being reported by Chinese officials.
Officially they've only had 50 outbreaks as of early this week but news of some sausage being found in travelers luggage or on traveling routes both going to Japan and to Taiwan testing positive for African Swine fever suggests that the disease is already well into the production systems and spread possibly further than the 50 cases that's officially being reported.

Fulton says, given the uncertainty in China there is potential for significant improvements on forward prices.
He suggests pricing in incremental targets, possibly in the neighborhood of an additional 10 to 20 percent of production for ever 10 dollar per CKG improvement in price.
For Farmscape.Ca, I'm Bruce Cochrane.

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