Futures Markets Reflecting Strong Supply/Demand Fundamentals

May 11, 2021

Forward hog contract prices have been exceptional the last few weeks.

That from Tyler Fulton, director of risk management with Hams Marketing Services.

"Futures markets are reflecting really strong supply/demand fundamentals," he said. "It's pretty typical that at this time of year, we see supplies start to tighten up. Into the summer months, we see some of the tightest supplies that we typically would see over the course of the year. That combined with really exceptional demand, both in the domestic and export markets, we're just kind of on a high right now."

Fulton notes cash prices are reflecting the same fundamentals that are getting worked into futures values.

"We've got a scenario where packers in the United States are finding it difficult to source all the supplies that they want. They want to be operating at full capacity, but quite simply, not all of them are able to find the supplies to do that."

He also gave an update on African swine fever.

"It's still wreaking havoc in China and is a huge factor that's impacting grain markets and impacting meat protein markets. There's still a massive deficit of meat protein for consumption in China and so they are still trying to contend with it."

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Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.