HAMS Marketing Services says COVID-19 fueled uncertainty over demand for pork is causing the greatest level of hog market volatility in 20 years.
As a result of fallout from COVID-19 hog markets are experiencing the greatest volatility we’ve seen in the past 20 years.
Tyler Fulton, the Director of Risk Management with HAMS Marketing Services, says we’ve seen a steady downward trend in the cash market over last week and the futures have lost about a third of their value over the past ten days.
What we’ve got is something unique that we’ve never seen before and that is that food service, or the restaurant business, has effectively dried up. There are still restaurants that are open for takeout in North America but very very few that are still open and significantly reduced traffic even if they are.
What we’ve got is a complete shift in where the pork is being consumed. We’ve never has any previous experiences with this and we think that there’s likely going to be some loss in terms of demand just because of the major disruptions. While there’s going to be some cuts that we’re consuming way more than we ever have before in the home, there are other cuts that the consumers are generally less likely to use to cook at home that will experience significant declines because there’ll be an over supply.
It’s really difficult to take the domestic situation and say we’re going to see gains in these cuts and losses in these cuts and then also apply on the layer of what’s happening on the export front. The export front is still generally performing fairly well but not near enough to offset all of the other uncertainty and the other disruptions.
~ Tyler Fulton, HAMS Marketing Services
Fulton says we’re going to have to take a wait and see approach and, examine in retrospect in future months, what demand did to figure out how things performed and how things can be improved.