Fears Over Losses from PED Drive Live Hog Markets

Mar 06, 2014

By Bruce Cochrane
The director of risk management with h@ms Marketing Services says fears over possible slaughter hog shortages due PED are driving up hog prices.
As a result of fears over the potential impact of Porcine Epidemic Diarrhea on slaughter hog supplies both cash and futures markets have caught fire.
Tyler Fulton, the director of risk management with h@ms Marketing Services, reports we have evidence of positive tests for the disease from five months previous and futures markets are reacting to speculation of significant losses and as a consequence the cash and futures markets are really taking off.

Tyler Fulton-h@ms Marketing Services:

We're at a bit of a turning point where we think that the hog numbers are going to start really taking a decline due to earlier losses.
To date we've not seen a significant effect from PED however by July it's anticipated that we could see something in the neighbourhood of four to possibly six, seven, we've heard estimates as high as nine percent in terms of a reduction in the herd.
To provide some perspective, our previous all time high in U.S. futures was about 108 dollars per hundredweight and we saw that a couple of years ago.
Today we're trading the June contract at 118 so that's almost 10 percent higher than the highest we'd ever seen previously and there's really strong indications that we could take this an additional five or 10 percent higher depending on how big the hole in marketings is.

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