Mark Rempe, of Quad Commodity Marketing Services, joked with Chip Flory on Wednesday's AgriTalk After the Bell, “I tell all my friends, ‘Pork is cheaper than dog food… buy all you can!’”
Rempe may have been joking, but he was also making a point, and hopes that low prices will lead to an increase in demand.
“This has been a counter-seasonal year in the hog market. We saw hog prices peak in January… that doesn’t happen very often. And now, when hog prices should be working to the upside, we’re stuck in an overall downtrend. Now is when we should see the market moving higher to get to a spring-early summer peak to give us a chance to put on some fourth and first-quarter hedges, and a lot of us really need that rally – nobody wants to hedge at a $10 to $12 loss.” said Rempe.
He also said if you need downside price projection in hogs, at-the-money, up-front puts offer about the only opportunity.