A Risk Management Analyst with HAMS Marketing Services warns retaliatory duties imposed on U.S. pork in response to the Trump Administration's tariff threats will have a far more negative effect on Canadian market hog prices than U.S. duties on imports from Canada.
As North American farmers await the next moves in Donald Trump's on again off again tariff war, analysts are monitoring developments in the U.S. as well as the international reaction to them.
Paul Marchand, a Senior Risk Management Analyst with HAMS Marketing Services, notes the price for a Canadian market hog delivered to a federally inspected slaughter plant in Canada is established in the U.S. so any response that lowers the U.S. base price will lower the Canadian price for hogs.
The way that our prices are determined, by using a U.S. base price, it means that Trump can put a 100 percent tariff on Canadian pork tomorrow and it's not going to move the prices of my producers a nickel.
What we're going to have to wait for is to see what supply and demand fundamental relationship changes in the states as a result of retaliatory tariffs because, if that's pressuring, then that's what's going to pressure Canadian hog prices.
So, my focus right now would be to look at Mexico.
How does Mexico retaliate on the U.S.?
The reason why Mexico is so important is because it is the number one export destination for U.S. pork exports so Mexico is really in a position to apply acute pressure to American pork and hog prices.
Canada is important.
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