Large slaughter numbers in the United States and the resulting increase in pork supplies should weigh on the Canadian hog sector in the short-term, but the long-term outlook remains more favourable, says an analyst.
“It feels like we’re in a bit of a transition time,” said Tyler Fulton, director of risk management with Hams Marketing Services.
U.S. hog slaughter has been climbing recently, taking pork production in the country to record high levels. Those heavy supplies are weighing on prices, according to Fulton.
“We’re probably right on the cusp of where some guys are profitable and some guys are not profitable,” he said.
Longer-term prospects look better, said Fulton, pointing to the premium in the deferred futures over the current cash market.
There are concerns that African swine fever in China will cut into that country’s pork production, Fulton said. A reduction in China would swing more demand to North American pork and underpin prices.