The director of risk management with h@ms Marketing Services expects the effects of PED to be the biggest factor affecting hog prices over the next six months. Live hog prices have fallen by about 20 percent over the past month from the record prices that resulted earlier this fall due to uncertainty over PED but they remain higher than year ago levels.
Tyler Fulton, the director of risk management with h@ms Marketing Services, says hog numbers have declined about five to six percent compared to year ago levels but the much heavier carcass weights have offset the large majority of that.
"Overall our pork production is down sharply but we’ve seen a lot of ebbs and flows to the production run and consequently have seen significant prices volatility. We do have a little better information than we did. In general we’ve got a idea as to what the death loss is on animals that will be coming in over the course of the next five months or so, so until late March, and the expectations is that our numbers, our hog supply will be running at a slight deficit.
But when you account for the heavier carcass weights we’ll likely be up about one percent from year ago levels which implies typically a slight drop in price compared to year ago levels. But then demand has also made some improvements over the course of the last year and so overall I think we’re still going to be looking at very profitable hog prices for the next five or six months. Beyond that is where the big uncertainty still lies."
Fulton notes PED tends to spread more quickly in colder weather so everyone is waiting to whether the number of cases spikes as the temperatures turn colder.
Source: AlbertaPork