Jason Wood, provincial livestock market analyst with Alberta Agriculture and Forestry, updates the hog market numbers.
Wood says hog markets strengthened from July to October but started to decline during November.
'Hog markets were expected to improve above current levels given forecasted global pork demand,' says Wood.
Between July and mid-October, the Alberta Index 100 hog price increased 69%. Producer margins followed, increasing above breakeven. Since mid-October, the Index 100 price has declined 13.6%, with estimated hog producer margins moving below breakeven.
'Seasonally, hog prices tend to move lower in November so the current decline is not out of line. However, the effect of COVID-19 has produced a number of counter-seasonal movements in hog prices this year, the most recent being the rise in prices during the July to mid-October period. Historically, prices move seasonally lower at that time.'
Woods says after peaking in mid-October, prices began to soften in response to demand concerns regarding the re-emergence of COVID-19 lockdowns and export market access.
He adds congestion has been increasing in a number of Chinese ports due to stringent inspection and disinfection requirements on imported frozen products. 'Recently, the Chinese government stated that imported goods are going to face increased testing due to worsening pandemic conditions in overseas countries. The Chinese National Health Commission states the risk of importing COVID-19 is growing and that the virus could be transported in or on packaging or products.'
Woods notes the turnaround time for refrigerated containers is increasing as a result of the inspection and testing requirements in China.
'This is affecting global supply chains and issues moving products within the cold chain are expected to grow as we move closer to Chinese New Year in February, especially for those trying to export to China.'
Tighter container supply is one issue but recently, Vietnam has also ordered relevant agencies to start testing for COVID-19 on imported goods from countries and territories that have reported outbreaks.
'The likely outcome of these additional testing measures for frozen imported goods,' says Wood, 'include increased costs back to the shipper and market access issues given import clearance delays.'
Source : alberta.ca