News

Volatility continues in the lean hog market

A market analyst says he doesn’t expect the volatility in the lean hog market to ease up anytime soon.

John Heinberg with Stewart-Peterson says any news coming out of China is causing the market to react and producers need to take steps to protect their margins.  “There are two things we watch”, he says.  “Let’s see if we get some good runs and some profitability on the cash side.  Make sure we’re locking some of those pigs in.  But then – go pick up that out of the money call or use a bull call spread where we keep some upside potential in that market overall.”

He tells Brownfield there is still plenty of upside potential in this market.  “There is a hole in the global protein situation,” he says.  “In that case – even if the pork is moving from Brazil to China or moving from Mexico to China, that pork is going to need to be filled from somewhere else.  And we’re more than likely the person to put that there.”

AUDIO: John Heinberg, Stewart Peterson