H@ms Marketing Services is advising Canadian pork producers to consider forward pricing to protect themselves from potential drops in live hog prices during the third and fourth quarters.
Although live hog prices typically rally at this time of year, as hog numbers tighten during the summer, prices have remained surprisingly stable.
Tyler Fulton, the director of risk management with h@ms Marketing Services, reports over the last 3 weeks the U.S. hog slaughter has been running 7 to 8 percent larger than 2013 levels.
Tyler Fulton-h@ms Marketing Services:
I say 2013 because 2014 was a real anomaly.
With all of the losses related to PED it makes it a really difficult benchmark to compare against and so I go back to 2013.
To look at a 7 to 8 percent increase in hog supply at this time of year relative to 2013 is a surprise to say the least.
It's concerning because, into the summer time frame, we're not going to run into packer capacity issues just because growth rates kind of slow down and hog numbers typically tighten up.
But by the time we move into September through November it starts to become a big issue.
The million dollar question is whether or not the hog supply will maintain these growth rates over 2013 levels.
Source : Farmscape