“The global pork market is experiencing a mixed bag of bright spots and uncertain trends, as emerging consumer preferences and trade dynamics create a fascinating landscape for industry players to navigate.”
Improved herd health has led to a boost in pig crops this year, but pork producers still face challenges in the form of uncertain input costs and weak consumer demand. According to a recent report from RaboResearch, steady production gains and stagnant consumption rates will continue to put pressure on global pork markets and trade for the remainder of the year.
One positive development has been the drop in corn and soybean prices in the third quarter of 2023. A successful harvest in the Northern Hemisphere has resulted in feed costs decreasing by 20-30% year-over-year in most regions. However, the report highlights that oilseed inventories offer little room for error, and weather conditions could potentially impact the South American growing season.
In the United States, lower feed costs following the harvest may help improve returns in 2024, but could also slow down herd reductions. Rabobank predicts a 0.8% increase in U.S. pork production in 2023. However, weak domestic demand is expected to continue to disappoint U.S. pork values.
Globally, importers are taking a cautious approach to pork in 2023, which is anticipated to carry over into 2024. Large inventories and high domestic production in key importing regions, along with rising EU pork prices, are expected to limit global trade. Despite this, U.S. pork remains competitively priced, and exports are expected to remain steady through the end of 2023. However, frozen inventories and weaker demand in some markets could pose challenges for U.S. exports in 2024.
In other regions, lower feed costs and improved productivity have increased industry optimism, but poor producer returns and weak consumer demand counteract these positive factors. Mexico is experiencing lower hog prices, while Canada has seen reduced capacity and margin pressure. Europe has witnessed a decrease in pork production and weaker consumption trends, while China’s sow herd has been shrinking. Southeast Asia has been impacted by African swine fever outbreaks, but prices are expected to rise in 2024. Japan has seen an increase in domestic pork production, while South Korea’s hog production remains steady. Brazil’s pork market is expected to remain competitive.
Overall, the pork industry continues to face challenges, but there are also signs of improvement and opportunities for growth in certain regions. Producers will need to navigate the uncertain market conditions and adapt their strategies to remain competitive and profitable in the coming months.