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·         Pork Producers Advised to Take Advantage of Strong Forward Pricing Options

… At some point there'll be diminishing positive effects from strong demand just because the prices are getting so high that it will start to ration off some of that demand…

 

·         Reduced Hog Numbers Offer Potential for Profit

… Since December we've seen futures values, in particular in the spring and summer time frame, increase 20 to 25 percent of their value so it's been a really solid run up…

 

 

Pork Producers Advised to Take Advantage of Strong Forward Pricing Options

 

Tyler Fulton - HAMS Marketing Services

Farmscape for March 31, 2021

 

The Director of Risk Management with HAMS Marketing Services is advising pork producers to consider pricing as much as 30 percent of their hog production through the spring, summer and early fall.

 

The U.S. Department of Agriculture's Hogs and Pigs Report for the first quarter of 2021, released last week, indicates U.S. hog numbers have declined about two and a half percent from year ago numbers, a higher decline than had been expected.

 

Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, acknowledges strong pork demand domestically and on the export front is supportive of higher prices but demand remains an elusive thing to nail down in the context of the pandemic.

 

Clip-Tyler Fulton-HAMS Marketing Services:

 

We've just got so many moving parts and so many changes from the normal relationships that we normally rely on such as the amount of product flowing through food service like the restaurant business and the amount of product going direct into consumers homes for home consumption so it's really kind of disrupted the normal supply chains.

 

That said, evidence still suggests that demand is really good.

 

We've seen exceptional consumption and generally improving prices over the course of the last six months.

 

That in a domestic market combined with what has been really strong demand from China continues to support the idea of higher prices but, arguably, what solves high prices is high prices.

 

At some point there'll be diminishing positive effects from strong demand just because the prices are getting so high that it will start to ration off some of that demand.

 

Fulton says hog prices look really good through the spring, summer and early fall time frames so he encourages producers to look at pricing as much as 30 percent...

 

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https://www.farmscape.com/f2ShowScript.aspx?i=27515&q=Pork+Producers+Advised+to+Take+Advantage+of+Strong+Forward+Pricing+Options

 

 

Reduced Hog Numbers Offer Potential for Profit

 

Tyler Fulton - HAMS Marketing Services

Farmscape for March 30, 2021

 

The Director of Risk Management with HAMS Marketing Services says tighter U.S. hog supplies can be expected to improve the profit potential for pork producers throughout the spring and summer.

 

The U.S. Department of Agriculture's Quarterly Hogs and Pigs Report, released last week, shows a higher than expected decline from year ago levels in the numbers of all categories of pigs on U.S. farms, about two and a half percent.

 

Tyler Fulton, the Director of Risk Management with Hams Marketing Services, says supplies will be on the tighter side for the next ten months.

 

Clip-Tyler Fulton-HAMS Marketing Services:

 

In North Americas as a whole we've been on a really solid run, both from a cash market standpoint and from a futures market standpoint.

 

Since December we've seen futures values, in particular in the spring and summer time frame, increase 20 to 25 percent of their value so it's been a really solid run up.

 

It does make sense, when you've got a high degree of certainty that we're dealing with a tighter supply, it does feed into that narrative of stronger prices.

 

There's not a ton of variation from the U.S. to Canada.

 

We've obviously got a stronger Canadian dollar that's impacting Canadian prices a little bit negatively but overall the outlook for profitability is very good until at least September.

 

Then there's a big question mark as to whether or not we'll see enough of an increase in the values associated with that time frame or at least enough of a decrease in commodity prices.

 

At current futures values we're probably not looking  at anything better than a break even for the November-December time frame because the futures aren't showing a lot of value and we've got new crop corn and soybean that is still very very expensive from an historical standpoint.

 

more

https://www.farmscape.com/f2ShowScript.aspx?i=27514&q=Reduced+Hog+Numbers+Offer+Potential+for+Profit