Production will slow in 2024 as the sow herd contracts in the main production regions, Rabobank shares in a recent global pork quarterly report. Analysts suggest this trend is expected to result in a decline or flat production throughout 2024, with disease pressures adding to the industry’s challenges.
Despite production woes, there is a bright spot as feed prices continue to ease.
“Lower feed costs are a welcome relief for pig farmers, improving margins in a time of uncertainty,” says Chenjun Pan, senior analyst – animal protein at Rabobank.
Corn and soybean prices have declined by 15% to 25% over the past 12 months. Further price declines of feed grains are possible given the stagnant demand and rising inventory globally, although the weather could potentially change the direction of supply and price movements beyond Q1.
Trade may contract in first half of 2024
Rabobank forecasts potential contraction in global pork trade during the first half of the year, as high inventories in importing countries dampen demand.
We’re looking at a soft market for pork exports, especially with the ongoing crisis in the Red Sea and Suez Canal complicating European shipments to Asia,” Pan says.
Production will vary around the world
As some regions grapple with declining herds, others like Brazil are on the rise due to global demand, Rabobank notes. The uneven growth across the globe, African swine fever (ASF) outbreaks and loss-making pressures are accelerating breeding herd reductions in Asia, particularly China.
China, the U.S., and some European countries are expected to have declining or flat production this year, as their sow herds were smaller at the end of 2023.
“We expect disease outbreaks to create ongoing uncertainty in 2024,” Pan says. “Meanwhile, productivity will continue to improve in 2024, driven by genetic gains, better farm management and cost reduction strategies.”
Still, negative profit margins, oversupply and weak demand will also be important drivers of destocking, the report points out.
Consumption remains strong amid inflationary pressures
Pork consumption has shown resilience in the face of inflation, with Rabobank expecting a mild improvement in global pork consumption in 2024.
“Pork continues to be a staple protein, holding its ground against more expensive meats like beef,” Pan explains.
Consumers continue to purchase pork in key regions, although they tend to be more cautious in their spending, the report notes.
