HAMS Marketing Services Reccomends Moderate Approiach to Forward Pricing

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Farmscape for February 1, 2019

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The Director of Risk management with HAMS Marketing Services is advising moderate approach to forward pricing given the evolving effects of African swine fever on the market. Abundant hog supplies, especially in the United States, have been weighing on the hog market. Tyler Fulton, the Director of Risk Management with HAMS Marketing Services says a weakening in futures prices for the summer and early fall suggests the possible effect of African Swine Fever on the North American market is still uncertain pushing any resulting improvements in North American prices further down the road.

Clip-Tyler Fulton-HAMS Marketing Services: The futures in general represent profitable prices I think but they have weakened quite significantly. Really the summer and early fall time frame have dropped more than 10 percent of their value over the course of the last month and a half or so. Producers I think have been fairly well served by taking a moderate approach and that is setting targets, pricing. I think there’s a good number of independent producers that are hedged at something better than 25 percent and more than out as far as the fall months. I think that producers should refocus and start looking at those fall time frames and setting targets modestly higher than what we’re currently dealing with now so that you can get some protection in there because I think at current price levels there’s some profits to be had or at the very least you can secure a break even which, in the last couple of years, has been a very difficult thing to do over the fourth quarter of each year.

Fulton says in the early days of the African Swine Fever outbreak the marled was content to put more value on the spring and summer months but, as we’ve moved forward and seen no tangible effects on the North American market they’ve whittled away those premiums and possibly pushed them back to the fall months.

For Farmscape.Ca, I’m Bruce Cochrane.

*Farmscape is a presentation of Sask Pork and Manitoba Pork

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