Farmscape for October 11, 2018
H@ms Marketing Services says the new United States-Mexico-Canada Agreement has improved confidence in the hog market although it doesn't address the main tariff issues.
Canada, the United States and Mexico are moving toward ratification of the USMCA, a new trilateral free trade agreement involving the three nations.
Tyler Fulton, the Director of Risk Management with h@ms Marketing Services, says the successful conclusion of negotiations has made a marked difference in terms of the market psychology.
Clip-Tyler Fulton-h@ms Marketing Services:
I think that the speed with which the agreement seemed to be reached, kind of ignoring the last year, I think you could see a bit of an improvement in pork values related to dealing with the uncertainty associated with it.
That said, the agreement really doesn't address the main issue of tariffs by Mexico against U.S. pork in retaliation to their steel tariffs.
I think moist market watchers and analysts anticipate some type of agreement being reached where that will move by the wayside but there's really no time line on it.
I think a larger trade agreement was the precursor to those tariffs being lifted and so now we've just got to the point where we can see Mexico start to lift those tariffs in response to a less protectionist U.S. government, especially on the U.S. steel and aluminum trade.
Fulton notes cash prices have climbed higher in a counter seasonal move.
He says August was extremely weak, but most of those losses were made up in September and prices are generally reasonable for the start of October.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork