Record high hog production could hit the U.S. this year, potentially surpassing last year's numbers, according to Tyler Fulton of h@ms Marketing Services.

Fulton says current hogs numbers are at the high end of U.S. Department of Agriculture expectations, and are likely to increase throughout the year, particularly in the fourth quarter when supply is heaviest.

"It's possible — especially with the added numbers that appear to be coming from Ontario into the U.S. after country of origin labeling was eliminated — it's possible that we could actually see larger hog numbers than the ability to process them," says Fulton.

Fulton says this would negatively affect prices. But right now, he says premiums for spring and summer futures are a good opportunity for hog producers to secure profitability.

"Right now a producer can lock in an April contract at roughly $13 U.S. per hundred weight higher than what the cash market is today," he says. "The summer time frame, that number is closer to something like $25 per hundred weight [higher]. These numbers are roughly double what the normal premium offering is at this time of year."

Fulton says this should indicate that cash markets will climb rapidly by summer time, but he doesn't think that will be the case. With the record-large production expectations, sluggish export markets, and competitive beef and chicken prices, Fulton thinks cash markets will probably struggle to meet the normal seasonality.