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Hedging Hog Production Advised During Uncertain Times
 
In anticipation of higher hog supplies and a potential trade war, the Director of Risk Management with h@ms Marketing Services is advising hog producers to forward price at least a third of their production.
 
Talk of U.S. tariffs on aluminum and steel, which could lead to trade retaliation on U.S. exports including pork, are depressing the deferred months lean hog futures.
 
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says a three cent drop over the past three weeks in the value of the Canadian has propped up Canadian forward prices and provided an opportunity to hedge.
 
Tyler Fulton-h@ms Marketing Services:
 
The new theme of greater protectionism in the United States is concerning.
 
I don't think any agricultural producer is positive about this from the context of its impact on commodity prices so I think that's really the focus of most people's decisions right now to be hedging.
 
We're generally advocates of pricing from September to December, at least a third of their production.
 
Just for some context, current forward prices are still trading nearly 10 dollars per CKG higher than what the cash price was in that same time frame last year.
 
Source : Farmscape