Farmscape for November 27, 2018
H@ms Marketing Services reports improved pork demand in regions South Korea and South America have helped offset lower movements of U.S. pork into China and Mexico.
Peak U.S. hog production and declines in wholesale pork prices have resulted in negotiated cash hog prices moving lower but have steadied while formula based prices have been on a generally lower trend.
Tyler Fulton, the Director of Risk Management with h@ms marketing Services says demand remains difficult to predict but it is key.
Clip-Tyler Fulton-h@ms marketing Services:
Through the summer months there was indications that domestic demand was not making the gains that we were growing accustomed to over the previous two years and that could have been from a greater influence from competing meats like chicken and beef simply because of the sheer quantities that's being produced.
We're looking at record levels of total meat and record levels specifically of chicken and pork and so the domestic market has seen some softness in price but, in terms of measuring demand, things are still generally pretty good.
On the export front the constraints to the U.S. market via tariffs from Mexico or China are likely continuing to have an impact on prices.
It's difficult to put your finger on exactly how much but I think it would be fair to say that we're looking at something in the neighborhood of eight to 15 dollars per hundredweight impact from the 78 percent tariff that China has placed and the 20 percent tariff that Mexico has placed.
Fulton notes, that said, South Korea and a number of countries in South America have really picked up their consumption and have probably offset some of the negative implications of those tariffs while uncertainty over the impact of African Swine Fever on future demand has had a positive impact on the futures market.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork