No one’s thrilled about pork prices right now.
But there are a few cheerier features of the markets today that producers should be grateful for.
1) Prices have not fallen off a cliff, as they are wont to do in the fourth quarter of the year;
2) The Russians are facing problems with Afrrican Swine Fever, and while it’s not good to find happiness in another’s misfortune, it means that they are likely to import more pork through the winter;
3) Hams are hot! There’s lots of ham moving out of the U.S. and that’s making pork values firmer than a lot of analysts had expected.
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These factors, and a general strengthening of consumer demand for pork from North American consumers, is making Manitoba Pork Marketing Co-op’s risk management manager cheery – and surprised. Tyler Fulton told me this morning, as he was heading out to Brandon to do a markets presentation to hog producers in western Manitoba, that he had actually become optimistic about the outlook for prices. He had expected prices to be flat this quarter – which would have been bad considering their big loss-making levels back in August – or even weaker. The fourth quarter is generally when a slump or crash occurs.
So looking at today’s Chicago Mercantile Exchange lean hog February futures chart is a lot more pleasant experience than he had expected.
If you factor in the rise of the Canadian dollar in recent months, it doesn’t look as good. And this rise means little to producers who can’t export live hogs to their usual buyers because of Country of Origin Labelling.
But mediocre prices that are trending the right way at an unusual time of year for pork strength bode well for the pork price outlook going into 2010.
And it makes sense that Fulton was feeling optimistic as he prepared to talk to groups of pig producers across Manitoba.
