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US Dollar Value to Impact Pork Exports and Live Hog Prices

15 May 2013
Manitoba Pork Council


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US - The general manager of H@MS Marketing Services Co-op expects the rising value of the US dollar and its impact of US pork exports to play a major role in the value of live hogs during the coming weeks, writes Bruce Cochrane.

Over the past two to three weeks the hog market has rallied with live hog prices going up by about 20 dollars per 100 kilograms fueled primarily by the typical seasonal decrease in marketings and increase in retail demand for pork.

Perry Mohr, the general manager of H@MS Marketing Services Co-op, says while the amount of pork moving out of storage right now indicates demand is strong and we are seeing hog prices increase as a result, export sales will be a key factor to watch.

Perry Mohr-H@MS Marketing Services Co-op

US exports have been below expectations for this year.

In March they were 18 per cent and year to date they were 15 per cent year ago levels.

When you're exporting 20 to 25 per cent of your total production a decrease of 20 per

cent has some implications on the domestic market.

Now all of a sudden that domestic market has to absorb all of that pork or they have to find new export opportunities.

One of the things that's a factor in that of course is the strength of the US currency which on Friday rose against all other currencies and that could have some short term implications to the level of exports going out of the United States because now all of a sudden, all of these importing countries, it's costing them more to import that pork.

Mohr says based on what we know about the market right now producers are encouraged to look at hedging a good portion of their supply right out to the end of the year.

He says there's a great deal of uncertainty on the demand side of the equation that could have some negative implications for price so, on the revenue side, producers need to know that they've got some of their hogs locked in.

 

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