Farmscape for April 5, 2018

H@ms Marketing Services suggests protectionist measures in the United States could ultimately disrupt the influence U.S. hog prices have traditionally had on Canadian hog prices.
Increased U.S. hog supplies combined with uncertain demand, particularly on the export market, have put downward pressure on North American live hog prices.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says growing uncertainty over demand for U.S. pork particularly in Mexico and Japan but also in South Korea, Central American and China is of concern as the United States is taking a largely protectionist attitude toward trade.

Clip-Tyler Fulton-h@ms Marketing Services:
When ever you're in a scenario where the supply is fairly certain and it's abundant and you've got uncertainty on the demand side, it really tends to put pressure on futures values.
Where that pressure is coming from is concern over NAFTA negotiations and more recently the implication of the added tariffs that the U.S. is placing on Chinese products and the retaliation of China that's actually largely focused on products such as pork, which would represent a 25 percent tariff, and could impact the trade flows to that country.
If the U.S,. continues in this protectionist attitude and we start to see some real barriers to their exports and for that matter imports into the United States of pork from Canada that would likely shift the historical relationship that Canadian hog producers have come to rely on.
That would be a scenario where Canada would have preferred trade access over their United States competitors.

Fulton says it's difficult to say how the whole thing will pan out but, in the long run, U.S. hog prices might become depressed while Canadian hog prices might appreciate a bit which would offset a portion of that usual discount.
For Farmscape.Ca, I'm Bruce Cochrane.

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