Continued Profitability Expected to Trigger U.S. Breeding Herd Expansion

Nov 10, 2014

By Bruce Cochrane

The director of risk management with h@ms Marketing Services warns continued profitability within the North American pork industry is likely to trigger an expansion of production.

Although Live hog prices have fallen over the past month or so from the record levels experienced this summer, driven by concern over losses caused by PED, they remain stronger than one year ago.

Tyler Fulton, the director of risk management with h@ms Marketing Services, says the expectation is that producers will be looking at very profitable prices for the next 5 or 6 months which will likely trigger an increase in production.

Clip-Tyler Fulton-h@ms Marketing Services:
You can not have an extended period of time of 6 or 8 months of really record profitability without that being a concern and already we've heard from U.S. sources that we can expect as many as 100,000 new sows entering into production which will no doubt grow the numbers.

More recently we've actually come down in price, pretty close to 20% over the past month, but of course that was from levels never before seen in the month of October so in general we're still trading at prices better than what we were a year ago but down sharply from what we were.

The real question is where will we be a year from now because if we have PED dealt with and we're dealing with a much larger breeding herd it's possible that the prices could be quite depressed.

Fulton is confident producers are looking at profitable prices for the next 5 or 6 months but beyond that is where the big uncertainty still lies.
He says PED tends to spread more quickly in the cooler temperatures so everyone is waiting to see if the number of cases spikes as the weather cools off.

Source: Farmscape

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