Hog markets and pork production have not moved as expected this summer.

Tyler Fulton of h@ms Marketing Services says normally we see a ramp up in pork prices from May to July, with a strengthening in domestic pork demand, but this year, that hasn't been the case.

"Cash prices have generally come under pressure by about five percent of their value over the last month or so. It's really been kind of a slow erosion, where packers have been cautious in paying up for pigs because I think they're starting to see they're not clearing the product as quickly as anticipated," he says.

On the plus side, he says packers have been able to build in a bigger operating margin for themselves, so that does bode well for the future. However, in terms of futures contracts, those have also taken a hit.

"Things are down fairly sharply since the hogs and pigs report came out, which pretty much showed we'd be looking at two and a half per cent more pigs in that November/December time frame," Fulton says. "It's going to be difficult to clear the market of all the product when we've got lower prices for beef available to domestic buyers, export markets are not performing quite as well -- part of that is just exchange rates don't favour buying product from the U.S. ... So a lot of these global factors are coming into play to depress the futures values."

That said, Fulton thinks there is still some reasonable value to what's being offered in the December to February time frame. He says producers should consider covering 50 per cent of their production in the winter months to protect against further declines.