Diversifying trading partners a key risk management tool

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Diversifying trading partners a key risk management tool

A livestock economist says diversifying trading partners could be the best form of risk management for the livestock industry.

University of Missouri’s Scott Brown says that means increasing export markets for US pork.  “If you depend on one market for a large amount of what you export and that market decides to go away, it can be troubling to prices,” he says. 

He tells Brownfield that’s especially a concern with China in the mix.  “We know the Chinese are trying to rebuild sow herds and the pork industry,” he says.  “I’m curious what their trade appetite will be if they’re able to get fully recovered in terms of pork production.  And I think the answer is they’ll want a lot less US pork.”

And Browns says by creating new and diversified trading partners it would reduce some of the volatility in the markets related to demand uncertainty.

Pork exports year-to-date are 24% ahead of last year’s record pace in volume and 29% higher in value and that is largely due to increasing pork purchases from China/Hong Kong.

AUDIO: Scott Brown, University of Missouri

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