Tyler Fulton, the director of risk management with h@ms Marketing Services said despite the recent exceptional global demand for pork; COVID continues to create uncertainty and market volatility. 
In light of recent sharp declines in pork product values, such as bellies which fell by 50 dollars per hundredweight the last ten days of August, the pork sector appears to be coming off of its phenomenal run of high hog prices. 
Fulton said producers are still seeing some exceptional live hog prices for the fall time frame, but COVID and the so-called fourth wave continue to throw uncertainty on pork demand. 
“Any way you cut it I think meat demand performed very well transitioning back to a normal environment where a larger percentage of the supply went through the food service. I think the global demand looks phenomenal.” 
The demand for pork and the future demand for all meats looks positive but recently part of the negative influence on things, beyond the typical seasonal lowering of prices, the influence from China exists. They’re a fraction of their former selves in the global purchasing of pork and not playing the same role thinking the Canadian industry can’t rely on Chinese demand and production.  
“They’re a wild card yet one of the biggest factors that we have to deal with as such a dynamic market with so many moving parts; it’s tough to know if we can rely on the demand moving forward.” 
However, he said the pig industry benefitted from exceptional consumer demand, both domestically and abroad, in the last five months. 
At the same time, Fulton said those producers with prudent risk management strategies would be the best positioned to manage the current volatility in hog markets. Not only falling live hog values, but anticipated high feed costs due to drought and ongoing disruptions caused by COVID continue to contribute to volatile hog markets. 
Therefore, it is essential producers manage properly with tighter margins coming into the winter months. 
“To be clear, we’re coming off of just a phenomenal run of high hog prices, so we could see some sharp declines and still be running at exceptional prices for the fall time frame. So, it appears that we’re not done with the disease yet.” 
Despite widespread vaccinations, there are still some pretty significant effects felt throughout the supply chains. So, it’s a fool’s game to figure out how COVID will next affect the pork sector, but it’s fair to say that producers with prudent risk management strategies are likely best to weather the uncertainty. 
There are still good forward pricing opportunities and, when one applies current feed costs, we probably see a better profitability potential than expected at this time of year. •
— By Harry Siemens