The “P” word has returned to the pork industry vernacular.
Profitability is back in sight with a number of factors working in the sector’s favor, according to the recently released report Rabobank Global Quarterly Pork Report.
Stabilizing sow herd contraction, reducing feed costs by offsetting inflation of other costs, and pork’s position in a value-conscious market are seen as this year’s key global issues.
Following the release of the report, Christine McCracken, senior animal protein analyst at Rabobank, said: “The industry’s improved supply and demand balance has led to a slowdown in herd contraction. Although significant breeding herd growth is not anticipated until late 2024 or early 2025, productivity improvements are contributing to increased production.”
As the US spring planting season unfolds, growing conditions will be examined to assess the impact on feed costs. The Rabobank report indicates that “a robust harvest in South America has further pressured prices, providing some relief from other inflationary costs.”
Pork has traditionally battled beef and poultry for meat supremacy, but the Rabobank report says pork is positioned as a cost-effective protein choice for the global consumer.
“This is particularly significant in light of rising beef prices. The trend toward frozen products and comfort food is expected to continue to drive retail pork sales, with a projected increase in processed and value-added meat sales as inflation rates peak,” according to with McCracken.
Stable exports
The volume of US pork exports in March, the latest data available from the USDA, remains stable compared to last year’s totals, but the figure is higher for the third month of 2024.
The U.S. Meat Export Federation compiles data from the USDA and reports that pork exports totaled 260,430 metric tons in March, an increase of 0.1% from the previous year. Exports are valued at US$740.8 million, up 2% year over year and are the seventh highest on record.
South Korea is a bright spot, as U.S. pork shipments to the Asian country in March were among the largest on record. According to USMEF, exports also increased substantially to Central America, Colombia, Oceania, Vietnam and Malaysia. The average value of pork exports per head slaughtered was US$70.85, the highest in almost three years and the fifth highest on record.
“Another strong month on the pork side and one that illustrates the importance of diversifying the export market,” notes USMEF President and CEO Dan Halstrom in a statement. “Shipments to Mexico decreased slightly, reflecting the anticipation of Easter, and yet the global total remained very robust through increases to Korea, Colombia, Central America and Australia. When the value of exports exceeds US$70 per head slaughtered, this is good news for pork producers and the entire supply chain.”
Pork producers have become accustomed to cautious optimism, and Rabobank lists factors to keep an eye on in the future:
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Changes in sow/pig inventories in key growing regions are linked to the impact of disappointing returns, structural changes in capacity, disease, additional regulatory costs and improved productivity.
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A shift to La Niña in the coming months could bring challenges to crop conditions and price forecasts.
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Sea lanes on some trade routes remain in danger, adding p
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The implementation of animal welfare policies in parts of the US and Europe could further restrict supply.
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Biosecurity remains a concern as disease pressures persist.
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Economic strength in the US, Europe and Asian countries will impact employment, consumption, investment and global trade.
As with almost any issue, the story has two sides. So while profits are coming back into the picture, don’t lose sight of happenings off the farm.
Schulz, editor of sister publication The Farmer, grew up on his family’s hog farm in southern Minnesota before pursuing a career in agricultural journalism, including National Hog Farmer.
