Farmscape for June 18, 2018
The Director of Risk Management with h@ms Marketing Services predicts higher U.S. pork supplies will result in discounts in the price consumers pay for pork.
A 25 percent duty imposed by China on U.S. pork and a 10 percent duty imposed by Mexico that will rise to 20 percent in July has created considerable uncertainty heading toward the fourth quarter when U.S. pork production is expected to be about five percent higher than one year ago.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says demand, both domestic demand and export demand, will be a critical factor.
Clip-Tyler Fulton-h@ms Marketing Services:
I would say that the current focus is on the impact of the 20 percent tariff that will be applied to pork, in particular hams and pork shoulders that go to Mexico.
Because it's such a significant player in pork exports, it could have a pretty significant impact on the market.
It's important not to over state it however.
I think you need to put it in context.
The supply increases that we're seeing far exceed the weight of any one export country.
Mexico does represent probably in the neighborhood of seven percent of total U.S. pork and so, if you apply a 20 percent tariff on that, there's no doubt it's significant but it wouldn't result in likely double digit percent losses in price.
Fulton says on the domestic side a lot depends on the U.S. economy and how pork compares in price with some of the competing meats like beef and chicken.
He says pork is still well positioned with domestic demand in good shape but we're probably calling on North Americans to consume possibly one and a half pounds more pork this year than last year and that will likely command discounts to clear the heavy supply.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork