Through 2023 thus far, it’s no secret that pork production has seen its challenges. According to Rabobank’s recent global pork quarterly report, even certain improvements struggle to help flip the narrative for the industry throughout the world.
BREEDING HERD
Overall, breeding herd reductions across many countries aside from Europe and South Korea are slow, despite ongoing margin pressure and limited optimism for a quick turnaround in global trade, notes the report.
This is likely a result of continued growth by larger hog operations while smaller producers consolidate or exit the business—which also leads to the expectation for improved industry fundamentals in 2024 and adequate cash reserves, the report explains.
A slow response to limiting production may also be a result of overall industry optimism for lower raising costs and favorable pricing due to tightening of global meat inventories.
The report explains that many EU and UK producers have already downsized their herds due to regulatory pressures and African swine fever (ASF) related trade disruptions, removing 5% of the sow base in 2023. North America and China were modest in herd reduction in 2023 but are expected to accelerate in 2024 due to weaker market conditions.
Rising productivity and lower disease pressure may also offset a portion of the anticipated breeding herd reductions, potentially limiting the market impact of projected production cuts, notes Rabobank.
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