Pork Producers Advised to Focus on Risk Management Amid Market Volatility Fueled by Russian Invasion of Ukraine

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Farmscape for March 1, 2022

Full Interview 7:12 Listen

The Director of Risk Management with HAMS Marketing Services is advising pork producers to focus on risk management strategies amid the market volatility being created by Russia’s invasion of Ukraine. Up to about a week ago the futures markets had rallied to some of the highest levels seen in years. Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, says since then the futures market has experienced a ton of uncertainty associated with all of the factors that come from Russia’s invasion of Ukraine.

Clip-Tyler Fulton-HAMS Marketing Services:
All commodity markets have really started to question the fundamentals that they had been trading based off of. Russia and the Ukraine, while they don’t have a direct influence on meat protein markets around the world, they do have a very significant impact on feed grain prices and feed grain supply. We have to go back to 2010 when they were a significant player in terms of bringing pork or other meat products into that country but, since then, they have really built up their meat industry and have become much more self sufficient in meat protein, so that’s not really the factor that’s making things uncertain. It’s more on the feed grains and even energy and fertilizer markets. Germany for example imports a fair amount of feed grains from the Ukraine, from that region and it would obviously have a pretty significant impact on their cost of production and therefore the size of the herd and the supply that comes out of western Europe.

Fulton advises producers to keep an eye on global feed prices and what strategies they can use to mitigate the effects of that volatility and the inflationary trends we’re seeing. He says predicting which way things will go with the current situation is a bit of a fool’s game but he notes there are tools to secure hog prices and feed costs and he suggests making use of those tools.

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