News

Opportunity for pork producers to mitigate some risk

An ag economist says US pork exports could see a boost as China has become the latest country to ban pork imports from Germany following its first reported case of African swine fever.

Steve Meyer, with Kerns and Associates, says Spain will pick up a lot of that business.  “But I think we’re going to pick up part of it,” he says.  “And when we do that, it’s going to take some product off the US market and should be positive for the cutout value and give packer some ability to chase some hogs.  And hopefully, that’s going to happen.”

Following the news, hog futures jumped significantly on Thursday and Friday, but did give back some of those gains on Monday and Tuesday. 

Meyer tells Brownfield if these big jumps in prices continue, producers should take advantage of it.  “I can’t get my cash forecast anywhere near those $80 marks for next summer,” he says.  “I think the futures market is offering you some great pricing opportunities.  But you have to keep in mind what your basis situation is, and that is a function of what is determining the cash price of your hogs.”

Last week, Germany, the EU’s largest pork producer confirmed its first case of African swine fever in a wild boar.  South Korea, Japan, and China have all banned imports of pork from the country. 

AUDIO: Steve Meyer, Kerns & Associates