Global pork outlook to improve by Q2

by MEAT+POULTRY Staff
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Jason McAlister, animal welfare manager for Triumph Foods, took a four-hour ride in the back of a trailer loaded with pigs.
Some improvements will begin to show in global pork markets leading into the second quarter.

NEW YORK – Sufficient supply and modest demand development mean the Rabobank five-nation hog price index will be at the lowest point since 2006, following a stronger-than-expected drop at the end of 2015, Rabobank said in its Global Pork Quarterly Q1 report. However, some partly seasonal improvements will begin to show leading into the second quarter.

“Recent positive demand and price developments in importing countries will start to support prices in exporting countries during Q1,” said Albert Vernooij, an animal protein analyst at Rabobank.

On a regional basis, exports of US pork are expected to pick up, supported by low prices, re-listing of pork plants eligible for export to China and repeal of US mandatory country of origin labeling, Rabobank said. Industry expansion is expected to slow after near-record supply growth in 2015.

China is expected to increase imports of pork, Rabobank said. Strong domestic prices and further swine herd reductions in combination with stricter environmental regulations are expected to support further increases in pork imports.

“The level of China's imports and relative competitiveness of major exporters is a major dynamic in 2016,” Rabobank said in its quarterly report.

Recovery of pork markets in the European Union faces strong headwinds following the suspension of the European Commission’s private storage scheme on Jan. 21, Rabobank reported. Private storage is key to the EU’s recovery, and reopening the scheme will be critical for further market support.

Finally, good domestic support and export demand for pork are expected to continue in Brazil. However, Rabobank said this will not result in higher prices because of the challenging domestic economy and low international prices for pork.

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