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Putting a plan in place to limit market risk

A livestock market economist says pork producers need to brace themselves for the ongoing volatility in the markets.

University of Missouri’s Scott Brown says margins are already tight and if pork producers don’t have a marketing strategy in place they are at a significant disadvantage.  “Because – depending on when that short window is for them it could be a really good time for them to be selling or a really bad time,” he says. 

And, he tells Brownfield, it could all change very quickly.  “Next Friday – we could have another conversation about what’s going on with the China trade situation and all the sudden have a deal that might be very explosive in terms of what US pork trade, US soybean trade – you name it.”

Brown says producers need to implement a risk management strategy that works best for them and leaves their upside potential open while limiting their downside risk.

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