Risk Management Tool Expected to Boost Hog Numbers Marketed12 August 2013
CANADA - H@ms Marketing Services is confident the introduction of a new Fixed Forward Price Program will help increase the volumes of hogs it markets to Thunder Creek Pork in Moose Jaw, writes Bruce Cochrane.
H@ms Marketing Services has launched a new Fixed Forward Price Program that allows pork producers who market to Thunder Creek Pork to price hogs up to ten months in advance of delivery.
H@ms general manager Perry Mohr says the program allows the producer at any given point in time to look out into the future to predict cash flows and lock in hog prices.
Perry Mohr-h@ms Marketing Services
It's a risk mitigation tool that has been very popular in Manitoba for many many years.
We started offering programs of this nature since 1995.
It varies in popularity.
Typically over the years we've seen producers lock in between 20 and 40 percent of their annual production on these types of programs.
The program is eligible to all hog producers that market to Thunder Creek through h@ms Marketing.
We hope that this will generate some additional business for us.
Right now our organization is providing a certain number of hogs to Thunder Creek on a weekly basis.
We hope that that volume will grow as a result of the program.
We consider it a very good tool for hog producers to utilize to mitigate risk.
From the plant's perspective, if this program helps solidify the producer and their ability to make money, it should also solidify the flow of hogs to the plant in the long term.
Mr Mohr says Canada used to be somewhat immune to what was happening in other parts of the world but now we're in a global market place and what happens in China has an impact on U.S. hog prices and if U.S. hog prices go up or down that has an impact on us.
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