Hog industry could enter cycle of higher prices
A leader with a Chicago-based risk management firm says after five years of expansion, the hog industry could be entering a cycle of higher prices in the short-term.
Tim Hughes, with CIH, leads the hog margin management team.
“For the first time since the expansion started back in 2015, we have a massive fundamental that may be supportive of prices,” he says. “Hopefully what we’re seeing now is the beginning of a new cycle—a cycle of increasing prices.”
Hughes says positive fundamentals for the industry include contractions, strong exports, great worldwide demand, and low cold storage.
But, he says there are still risks facing the industry.
“COVID-19 disruptions, ASF if it were to enter, China rebuilding, other viruses etc.,” he says. “Margins are not strong historically, but protecting the downside while maintaining upside flexibility may be prudent to a certain extent.”
Hughes made these comments today during the Midwest Pork Conference.