The US Department of Agriculture's Quarterly Hogs and Pigs report, released 27 June, showed an eight percent year over year increase in slaughter hog numbers, easily the largest since 1999. Speaking to Farmscape, Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, says as large as the hog numbers have been and as burdensome as the pork inventory has grown, this took us to another level, further increasing pressure in both the cash and futures markets.

"We're seeing a continuation of unprecedented volatility," says Fulton. "The market is really struggling with trying to reconcile the near-term heavy supplies and abundant production levels against the possibility of exceptional demand, in particular in the export markets as a result of the African swine fever situation in Asia. Those two are at odds with each other.

"I mention possible because we haven't seen any tangible moves in the export market that would allow us to really expect some major increases in sales which is what we would need to see in order to clear some of the surprisingly huge supplies of pork in North America."

Fulton says there is an expectation that we'll start to see more pork moving into China but the time line is extremely grey and there are constraints, such as the trade disruption between China and the United States. However, he notes, ASF continues to spread throughout southeast Asia so we're not necessarily dependent on China and, if European suppliers focus on China, that may open up other destinations.