By Bruce Cochrane.
The Director of Risk Management with h@ms Marketing Services says demand for pork in key markets like China, Japan and Mexico will play a key role in clearing a backlog of North American pork.
Although live hog prices have faced downward pressure over the past couple of weeks due to the seasonal increase in hog numbers and faster growth, wholesale pork prices have been slower to move.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says exports haven't performed quite as well as we would hope but there's generally a belief that North America is well positioned for the next six months or so.
Tyler Fulton-h@ms Marketing Services:
I think you could argue that North American pork is probably some of the most competitively priced pork in the world right now with the declines that we've seen.
But, of course, you need to be calculating that based on wholesale pork values, what's being traded, and that hasn't come down as quickly as what live hog values have.
Going forward we need to see exports continue to improve.
China has been a big destination for North American pork in terms of the percent growth over the last several months and we need to continue to see that as well as see our largest trading partners, Mexico and Japan, improve as well.
From a domestic standpoint things are somewhat stagnant.
There's heavy supplies of beef and very abundant supplies of chicken and turkey so the consumer has a lot to choose from right now.
Consequently that's part of the reason why we're struggling to be able to move the product and clear it except in export markets.
Fulton says, on the demand side, it would be fair to say that, given price concessions, we'll be able to move the quantities to clear the market but the question is, at what price?
Source: Farmscape