Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, attributes the highest level of hog market volatility in two decades to speculation over African swine fever.

Speaking to Farmscape.Ca, Fulton says we're seeing the highest volatility in hog markets in 20 years, stemming from speculation on how African swine fever is impacting the Chinese herd and whether the Chinese will be active in replacing those losses.

“Given that the US economy is still performing reasonably well, I think pork demand also continues to perform well,” he says.

“The real issue that has promoted a huge amount of volatility over the last three weeks or so is the issue of US pork exports, most specifically, the potential that there may have to be a great volume shipped to China in response to African swine fever. That issue by itself has effectively trumped every other issue out there.

“We are seeing weaker pork exports to Korea and Japan than we were - and to Mexico for that matter - so the policies and the timelines as to when we might get a resolution are a significant issue in the market.

“If we can see light at the end of the tunnel, or if we can see a resolution to the Chinese-US trade dispute, then it brings us one step closer to actually being able to move significant volumes of pork to China in response to the domestic shortage that they have there.

Fulton says there's still a large question as to whether the Chinese purchasers are going to be looking to the US and, as it sits right now with the 65 percent tariff in place, the US market is probably not the first place they're looking.