Pork demand key amid record live hog supplies

Increased slaughter capacity has kept pace with hog numbers but record supplies of live hogs, especially in the United States, and resulting large pork supplies have led to a softening of live hog prices.

Tyler Fulton, the director of risk management with HAMS Marketing Services, says demand will be a critical factor:

"Demand generally I think remains quite strong.

"In terms of domestic US demand you can draw a line that correlates very well with the performance of the overall US economy. When the economy is doing well generally pork demand is pretty solid.

"There is a concern that if we see any kind of hiccup in that US economy we might be in a bit of trouble.

"Then moving over to the export side, I mentioned the Mexican and Chinese situations. The US is going to probably lose a little bit of market share to Canada in a market like Japan where the CPTPP has been ratified and has come into effect.

"That will possibly shift buyers to consider Canadian product over American product.

"That has a bit of a complex effect on hog prices in Canada, just because we base our prices on that US market, but needless to say, it's a very positive thing to have a proffered trade access to a market such as Japan."

Fulton says the premiums that had resulted four to five months ago in spring and summer futures due to African swine fever have shifted to September, October and beyond.

He says the million-dollar question is whether China will be active in the world market replacing production lost due to African swine fever.

As reported by Bruce Cochrane, Farmscape.Ca