The Director of Risk Management with h@ms Marketing Services anticipates the full benefit of new U.S. slaughter capacity will be felt next spring and summer.
Over the past week or so live hog prices have declined.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says it's a really interesting dynamic right now.
Tyler Fulton-h@ms Marketing Services:
What we've seen in the last week or so is cash markets starting to trail off a little bit.
What I'm talking about is U.S. regionally negotiated prices.
What I think is happening is there's just an overwhelming supply that's available to them despite the fact that we've got these additional two new plants that are coming on stream.
Things are never perfectly smooth in terms of ramp ups and we don't have good information on how these plants are performing but I think it's fair to say that they have had a very positive impact to the cash market trend over the course of the last two months since they've been running but it's not linear.
It's not a perfect relationship and we're seeing a little bit of weakness recently possibly because of this heavy supply.
Source : Farmscape