Rabobank: Weaker economy is taking a toll on global pork consumption

Weaker economic growth is beginning to take a toll on global pork consumption.

Rabobank has published its report "Global Pork Quarterly Q2 2023: Consumption in Focus as Pork Industry Plans for the Future." Weaker economic growth is beginning to take a toll on global pork consumption. Rabobank expects the lagged impact on consumption is likely to be felt throughout 2023.

Although Rabobank expects a modest improvement in production costs in 2023, local conditions will vary and risk management will remain critical to success. Global feed stocks are at historically low levels, and availability remains tight. A disappointing Argentine harvest will partially offset Brazil’s record 2023 soybean crop, and the small global cushion in grain and oilseed stocks is expected to drive additional feed cost volatility in 2023.

These are the main highlights:

North America: Pork exports from the US and Canada remain competitive in key markets, but hog production growth will slow as consumption softens. Losses are mounting.

Europe: Europe’s supply of pigs is expected to remain tight in Q2. Meanwhile, producer margins are recovering on historically high pig prices.

China: Prices have been weakened by soft demand and additional losses following African swine fever. Production is expected to tighten in late Q2 and Q3, leading to higher prices as demand begins to recover.

Brazil: Exports continue at a strong pace, and expectations of a drop in feed prices improve the margin outlook for producers.

Southeast Asia: African swine fever remains a challenge for the region. Consequently, slow growth is expected in 2023.

Japan: Pork demand will be weaker in Q2, with pork imports from Europe expected to decline, due to high prices and high inventories.

SOURCE: Rabobank