Farmscape for March 3, 2022
The Director of Risk Management with HAMS Marketing Services expects tight North American hog supplies and potential increased pork demand from China to limit the impact of Russia's invasion of Ukraine on North American hog markets.
Until about a week ago the futures markets had soared to some of their highest levels in years but Russia's invasion of Ukraine has resulted in a ton of uncertainty.
Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, says Russia and the Ukraine have a very significant impact on feed grain supplies and prices.
Clip-Tyler Fulton-HAMS Marketing Services:
One thing I think to watch for is the possibility of seeing greater influence from China in terms of imports, especially if we start see a further slide in North American prices.
That might become a trigger point to start purchasing higher volumes from North America.
I think the other situation is, just broadly, what are global feed grain prices doing and what strategies can producers take in order to mitigate the effects of the volatility and those inflationary trends that we're seeing on the feed grain side and then how does that factor in to their whole farm risk management plan.
We're still dealing with a relatively tight supply, tighter than really anybody had anticipated.
With, for example, year to date hog slaughter in the United States being down eight percent, that really is a tight scenario so it's unlikely that we're going to see a significant drop in prices but I think one thing that is going to be a pretty steady theme is the uncertainty and the volatility that goes with that connected to the whole situation in the Ukraine.
Fulton acknowledges all commodity markets have started to question the fundamentals under which they are trading.
He advises pork producers to keep an eye on global feed prices and concentrate on strategies they can use to mitigate the effects of that volatility.
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