Farmscape for June 30, 2020
The Director of Risk Management with HAMS Marketing Services says a massive year over year increase in the number of hogs available in the U.S. for slaughter continues to pressure North American live hog values.
USDA released its quarterly hogs and pigs report last week.
Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, says the backlog of hogs due to COVID-19 continues to impact prices.
Clip-Tyler Fulton-HAMS Marketing Services:
I think probably the biggest take away from the report was some pretty massive numbers, year over year increases in the heaviest market weight categories.
What we're talking about is the hogs that are going to be coming to market over the next two months or so.
Those year over year increases were in the double digits, were over 10 percent larger than year ago levels.
It's been 20 years since we've seen any year over year change of that magnitude.
But, when you think back to what we've just dealt with over the course of the last two months, they were taking these surveys just two or three after the lowest slaughter capacity.
When we had the plants go down in the United States that were dealing with COVID-19 through their labour force, they effectively cut the U.S. slaughter by one third.
So just two or three weeks later the hog producers that were answering the survey were responding to the questions in exactly the way that they would normally and that meant that all of that backlog of hogs that weren't getting slaughtered, they were reporting on.
I think that that had probably skewed some of those numbers in a pretty big way that we simply still need to work through over the course of the next two months or so.
Fulton says we've now gone a good three months were prices have not been profitable and, with no prospect for any difference in that trend, its really tough times right now.
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