Farmscape for May 12, 2017

The director of Risk Management with h@ms Marketing Services is advising pork producers to seize the opportunity to lock in live hog prices by forward contracting a substantial portion of their production.
Following counter seasonal declines in cash hog prices during March and April prices have surged over the past couple of weeks, fueled by exceptionally strong export demand for U.S. pork and stable domestic demand, recovering most of those declines.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says the rally has created an opportunity to lock in very good prices.

Clip-Tyler Fulton-h@ms Marketing Services:
Producers have been very active in forward contracting over the course of the last week or two weeks.
They're taking advantage of this sharp rally that we've in lean hog futures and consequently in forward contract prices.
Generally speaking we think that there's a lot of opportunity to price as much as half of one's production out to then end of 2017 just simply to capture the value that's already in place there.
To put it in perspective, the forward prices are running roughly 25 percent higher than what the cash prices were last year, in 2016, and this in the context of the expectation that we're going to be dealing with four to five percent more pork in that last half of this year.
When you've got a scenario where you can lock in a price at 25 percent higher value than what it was last year and you're expecting four to five percent more supply it's a pretty good scenario I think that's why producers are taking advantage of it right now.

Fulton says the proximally 25 percent increase in export demand for U.S. pork over year ago levels is just what's been needed to keep pace with the increased volume of pork the U.S. is producing right now.
For Farmscape.Ca, I'm Bruce Cochrane.

       *Farmscape is a presentation of Sask Pork and Manitoba Pork