Changes in the Mexican and Japanese administrations, an election in the US, and the trend toward regionalized trade could create a less supportive trade environment for pork in 2025, said the analysts.
“Retaliatory trade actions like China’s anti-dumping case against the EU also highlight the industry’s need to remain nimble. Recent labor and weather-related logistical challenges only compound trade uncertainty and highlight the need to build domestic demand diversify markets.”
Despite improved profitability, global pork producers are hesitant as regards herd rebuilding due to ongoing trade, disease, and demand uncertainties, found Rabobank’s Global Pork Quarterly.
The global sow herd remained steady through Q3 2024, with little sign of expansion despite improved profitability in some regions.
Biosecurity remains a top priority due to ongoing disease risks, commented the analysts. “Disease outbreaks in South Korea, Russia, and the EU have led to production losses in 2H 2024, limiting herd rebuilding despite effective biosecurity measures. China’s moderating disease pressure should support a return to herd growth in 2025. Slight production growth is also expected in Brazil, the US, and southern EU countries.”
La Niña's impact on feed production and costs
Logistical challenges and potential impacts from La Niña further complicate the market.
"Global feed inventories are nearing their best level in years, and hog production costs are lower in most regions. However, dry conditions in South America and Asia remind us that feed cost advantages are not uniform. In 2024, lower corn and soymeal costs have provided margin relief in some regions, while tighter wheat supplies have kept costs high in others.
“Even a mild La Niña creates regional disparities,” cautioned Christine McCracken, senior animal protein analyst, RaboResearch.
Concerns about localized production shortfalls due to La Niña are focused on South and Central Asia, southern South America, northern Mexico, and East Asia. Dry conditions in Brazil have already delayed soybean planting and could reduce safrinha corn acreage in 2025.
Consumption trends
Pork consumption continues to improve, driven by better economic trends, noted the pork market specialists.
Lower energy costs are helping to slow inflation, though higher costs for services and food weigh on consumers. Stronger seasonal demand and the inflated cost of competing proteins should support favorable consumption in Q4 2024.
“Consumer confidence remains a challenge in many markets due to ongoing economic difficulties. Consumption trends will impact prices, investment decisions, and global trade,” commented McCracken.
