An oversupply of pork in China is turning heads and bringing up a lot of questions about the future of pork exports to the world’s largest consumer of pork.
“Record-high prices have shifted consumer preference. Pork is still their favorite meat in China, but not to the extent it was,” Arlan Suderman of StoneX told AgDay’s Clinton Griffiths.
The demand for beef, mutton, poultry and other protein sources is increasing, resulting in oversupply in China, he notes. Pork prices are returning to levels that they were pre-ASF.
“Data that just came out from China showed in the third quarter of this year, pork production was basically down 10% from pre-ASF levels, but with demand down and some level of imports still coming in, they have an oversupply,” Suderman said. “The expectation is that oversupply of pork is going to continue to hurt feeding margins, right now negative about $100 per head, well into next year before they start to turn things around.”
StoneX is concerned that this will reduce imports of soybeans as well.
“How does that trickle into the U.S. pork market?” Griffiths asked. “For pork producers here in the U.S., how much pressure could we see applied?”
Suderman said U.S. hog producers will continue to see that trend lower, and expects to learn a lot more about that over the next 30 to 60 days.
“The fourth quarter is typically when we see our biggest supply going through the hog harvesting process. We’re starting to see some signs, following a recent court ruling, of some packer capacity issues. Carcass weights are starting to work their way higher. The concern is, can we get the hogs we need, and do we have enough demand for the product to do that?”
More from Farm Journal’s PORK:
Supply Chain Jenga: Be Careful What Piece You Remove Next
