Farmscape for May 28, 2019
The Director of Risk Management with HAMS Marketing Services says the removal of U.S. tariffs on Canadian and Mexican aluminum and steel and Canadian and Mexican retaliatory tariffs on U.S. products is a definite positive for North American pork producers.
Last week the United States lifted duties imposed last year on steel and aluminum imported from Canada and Mexico and, in turn, Canada and Mexico have ended retaliatory tariffs on American products.
Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, says that unequivocally is a positive for the North American hog market.
Clip-Tyler Fulton-HAMS Marketing Services:
When there was a tariff in particular that Mexico placed on U.S. pork it had the effect of lowering the price of hogs in the United States and in Canada.
What effectively was happening was the Mexican consumer was paying that tariff and because they had to pay a higher price for pork it meant that they consumed less and, when they consumed less that resulted in a back up of supply in the United States and consequently pressured prices domestically.
Because our price in Canada is a direct function of some U.S. pricing points that translated into lower prices for Canadian pork as well.
Fulton says the Chinese tariff on U.S. pork is no doubt a detriment but whether or not that is having a real impact on the amount of U.S. pork being consumed in China is difficult to know but hopefully, as time moves on, we'll get a clearer picture as to what that relationship is.
He says the effect of the Chinese tariffs on U.S. pork on the movement of Canadian pork is also difficult to be assess and is more likely to be determined in hindsight as pork export numbers become available but, he says, with Chinese domestic production down 20 percent they'll be looking for alternatives and hopefully Canada and the U.S. will see some improvement in terms of export volumes to that country.
For farmscape.Ca, I'm Bruce Cochrane.
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