A few big unknowns are making the 2019 pork outlook interesting to say the least. Although continued expansion and record production remain known concerns, strong margins and seasonal highs give producers reason to be optimistic, says Ross Logan of Commodity and Ingredient Hedging (CIH) in Chicago.
Based on current projected margins, he believes the outlook is good. Generally, producers are projecting profitability for the year and current profit margins are above a 5- and 10-year average, he adds.
“That being said, there are a wide range of possible outcomes when it comes to trade and disease for 2019,” he says. “With all the variables affecting the markets right now, it really reinforces the importance of a strong margin management policy.”
Several factors affect supply and demand every day. Oftentimes, the factors that lead to a particular price are unknown until after the fact. With all of the information coming out about pig health in China, it can be hard to separate the “noise” from the facts, he adds.
“It can be difficult to know which information to trust and what factors are or are not affecting price. Price is simply the result,” Logan says. “Regardless of what is happening over there, one thing we know is that price in China has not been significantly impacted… yet.”
What do you think? Let us know what you predict will be the biggest game changer affecting the markets in 2019 by answering our PORK poll.