Resurgence of profitability in global pork industry
“After several months of decline, sow herd numbers in key regions are beginning to stabilize.”
Better-than-expected consumption trends and lower costs of production in most regions are playing a central role in the improved outlook for hog prices and providing early incentives to begin rebuilding the herd, noted the industry experts.
But prospects for significant growth in the breeding herd is not expected until late this year or early next year. Consequently, pork supplies are anticipated to remain constrained in the foreseeable future, they added.
Improved herd health in major pork-producing countries like the US, Canada, and China is contributing to production stability, but regions grappling with persistent health challenges or regulatory burdens may experience a more gradual recovery, cautioned the analysts.
“Although there has been some stabilization of the herd and a return to growth in some regions of the EU, especially Spain, it is unlikely the region will ever fully recoup lost production given added regulatory constraints.”
Feed costs
The sector's return to profitability is buoyed by lower feed costs, attributed to ample global stocks of grains and oilseeds.
Additionally, a robust South American crop is exerting downward pressure on prices, though attention remains focused on growing conditions as the Northern Hemisphere enters the 2024 spring planting season.
Pork consumption showing signs of improvement
The analysts report that pork continues to show resilience as a cost-effective protein despite a temporary dip in consumption across key Asian markets earlier in the year.
In the face of escalating beef prices, pork retains its appeal to budget-conscious consumers globally.
The shift towards frozen products and home cooking is expected to sustain retail pork sales, with a corresponding rise projected in value-added and processed meat sales as inflationary pressures peak, highlights Christine McCracken, senior analyst, animal protein, Rabobank.
