UTRECHT, The Netherlands – Market imbalance is the theme in the global pork industry, as the impact of African Swine Fever (ASF) in China has pushed prices in some regions to record highs, while the windfall for some major pork exporters, including the US and Canada, are limited due to tariffs on products imported by the world’s biggest consumer of pork.

According to Rabobank’s Pork Quarterly Q4 2019 report, balancing supply and demand in the face of higher prices has been made more challenging by  pork producers who are exercising caution in a global protein market that is proving to be difficult to predict. According to Christine McCracken, senior analyst of animal protein at Rabobank, most producers are slow to increase production as they see risks overshadowing rewards. Meanwhile, Rabobank expects prices to rise even more, “magnifying an already tenuous situation.”

“Despite rising economic incentives, we expect a limited global production response, as environmental and regulatory constraints, along with the threat of African Swine Fever (ASF), constrain the industry’s ability to expand,” McCracken said in the report.

A summary of the report includes mention of expectations exceeding productivity gains in the US as record-high slaughter numbers are not offset enough by overall global export demand. Looking to 2020, Rabobank analysts forecast production increases to be significantly more moderate.

In China, a seasonal spike in demand fueled month-over-month retail price increases of 78 percent, resulting in an ASF-induced pork shortage in much of the country. Higher prices are hindering continued demand growth as herd-rebuilding is bolstered by economic incentives in China. Pork exporters in Europe are benefiting from the absence of tariffs on its products shipped into Asian markets. Europe continues to be the main global supplier of pork despite the presence of ASF, which has been mostly limited to areas where feral swine are prominent.

Pork exports from Brazil to China also continued to grow through September, according to Rabobank, at a pace that was about 33 percent higher than the same period last year. Improvements in profit and price, to $2,297 per metric ton, a 17 percent increase.