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Demand Key to Influencing Pork Profitability in 2015

15 January 2015
Manitoba Pork Council

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CANADA - Consumer demand for pork will to play a key role in influencing profitability in the hog industry in 2015, according to the director of risk management with h@ms Marketing Services expects, writes Bruce Cochrane.

In 2014 pork producers saw record breaking profits as PED constrained hog supply pushing hog prices as high as just shy of $300 per pig Canadian.

Tyler Fulton, the director of risk management with h@ms Marketing Services, says this year PED seems to be largely constrained and will be much less of a factor so other influences, first and foremost demand, will play a role.

Tyler Fulton-h@ms Marketing Services

As far as the US and Canadian economies go, things are firing on all cylinders, and so generally there's a greater ability for US consumers to be buying pork.

Now the question comes down to willingness and that, in large part, the question comes into play when you're considering the alternatives.

You've got very expensive beef on one side, but what looks to be very plentiful and inexpensive chicken on the other, so the real question is whether or not the consumer will be willing to pay near comparable prices as what we saw in 2014 and consume more.

The other factor that comes into play on the demand side is export sales and quite simply the US dollar being as high and as strong as it recently has been is really kind of making it difficult to maintain or even come anywhere close to year ago pork sales to countries like Japan, Korea and even Mexico and so that's going to be factor that needs to be dealt with.

Mr Fulton says the question become whether or not consumers in North America will step up and consume significantly more pork in order to clear the necessary volumes.

TheMeatSite News Desk

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