Amid trade-related tension and market volatility, Canadian hog producers are seeing strong live hog prices, even as U.S. tariff threats loom. According to Paul Marchand, Senior Risk Management Analyst with HAMS Marketing Services, cash markets have shown resilience, offering producers solid returns despite broader geopolitical concerns.
While futures markets have been pressured by uncertainty tied to potential trade actions from U.S. President Donald Trump’s administration, cash hog prices have remained firm, particularly in Canada. Marchand notes that the first week of 2025 saw the highest base price on record for live hogs delivered to Canadian processors. Although prices have followed expected seasonal trends since then, the broader market tone remains positive.
“There’s a positive margin to be had right now with forward contracting,” Marchand said. “Producers should be reviewing their strategies with marketing and management teams to determine whether to lock in profits or wait for further market signals.”
Despite concerns over tariffs, Marchand emphasized that the USMCA agreement continues to offer stability, shielding North American pork from direct trade penalties for now. However, the potential for retaliatory measures remains a key risk factor.
“Because our base prices are set in the U.S., retaliation from other trading partners could impact Canadian producers indirectly,” Marchand explained. “Right now, there’s no reason for Mexico or Canada to retaliate, but that could change quickly depending on how trade negotiations evolve.”
For risk-averse producers, locking in current margins through forward contracts may be a practical way to manage uncertainty. However, Marchand also acknowledged the delicate balance: future market improvements could leave some hedged positions out of the money, depending on how global trade dynamics shift.
Ultimately, he advised producers to evaluate their individual operations and risk tolerance. “It’s a very much ‘wait and see’ environment. Risk management isn’t about hitting the market peak—it’s about protecting your business and sleeping at night,” he concluded.
