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US-China pork trade boosts live hog values in Canada

The Director of Risk Management with HAMS Marketing Services says the increased movement of US pork into China is good news for American and Canadian pork producers.

22 October 2019, at 10:54am

China's suspension of punitive tariffs on US pork has sparked a recent increase in Chinese purchases of American pork. Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, observes that the futures markets have started to see some support.

"For really more than a year now we've kind of been waiting just to find out whether we would see some increased exports and it was not so much a question of if as much as when those orders would start to show up,"says Fulton in an interview with Farmscape.

"It appears fairly consistently, now for three even four weeks straight we've seen a steady flow of orders for pork from China from the United States and at volumes that are significant, and it appears that they [orders] are growing in numbers.

"Because our market in Canada uses US pricing points, when the American producers are benefiting from increased pork exports it actually benefits Canadian producers as well. We are a fully integrated market.

"There's not a tonne of live animals that move back and forth... across that border but we really are an integrated market and, when there are increased exports from the United States overseas, that's equivalent or in some ways even better for the short term for Canadian producers, that will see a benefit from higher prices."

Fulton says the futures have seen roughly about a five to ten percent move over the last week or so.

He acknowledges the Chinese pork orders may be contingent on the completion of what's being called the mini-deal with China, but this comes when a lot of this pork needs to be moving from North America to, in particular, China.