Supply discipline key for pork industry
UTRECHT, The Netherlands – Multiple “swing factors” will impact the global pork industry in 2013, which will make supply discipline key to success for the pork industry, according to Rabobank.
Rabobank analysts expect some weakness in pork prices late in Q1 and into Q2 because of production pressures and limited growth in global consumption. Variables impacting 2013 pork prices include the extend of declines in European production due to sow pen regulations; demand from China; and whether US production will continue to expand, despite surging feed costs, Rabobank stated.
Price movements in China will set the tone for the year moving into Q2, and Rabobank analysts said they expect global pork prices to come under slight pressure due to production growth in China, the US, Brazil and Russia outpacing growth in global consumption.
Higher prices for pork were forecast for 2013 because drought in the US and Black Sea region in 2012 led to low inventories of feed crops and adverse weather in pork producing countries continues to limit production expansion, Rabobank reported.
“Despite the higher feed input costs, the US swine-breeding herd has modestly expanded and large-scale farming continues to develop at a rapid pace in China, Russia and Brazil,” said David Nelson, Rabobank analyst. “There seems to be limited opportunity for a significant increase in pork prices, given this expansion. Chinese hog supplies appear to be sufficient, but their economy is recovering – which could stimulate demand growth.”