Disciplined Market Approach Recommended Amid COVIDD-19 Fueled Uncertainty

Apr 13, 2020
The Director of Risk Management with HAMS Marketing Services is advising pork producers to adjust their price expectations, set attainable targets and stick with those targets. Uncertain demand for pork, both domestically and internationally due to COVID-19, combined with expanding slaughter hog numbers have resulted in the highest level market volatility in 20 years, driving dramatic declines in both the cash hog market and the futures.
 
Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, acknowledges it's an extreme situation as producers watch prices collapse.
 
Clip-Tyler Fulton-HAMS Marketing Services:
 
We're dealing with weekly slaughters that are still up over 2.7 and even close to 2.8 million over the last several weeks. Our year to date slaughter is darn close to five percent larger than what it was this time last year. Those are big increases and so, you apply those huge supply levels against this uncertain demand and it simply results in no certainty as to what the near term future will bring and that's what's resulted in this steep decline both futures and cash values.
 
I think we are seeing a little bit of support. They will find a bottom at some point and hopefully we're starting to see a little bit of support just because, with low prices, it should bring on increased consumption and be able to clear some of that product. Whether or not that comes from the domestic market or from the export side or both is a big question.
 
I still stand by the idea that markets are the best way to determine where that product should go but the signals that people are getting from the markets are just murky. They're not clear because we're seeing so much volatility.
Source : Farmscape
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