Weekly Product Updates

W42: Pork Update

Frozen Pork Ham & Shoulder
China
Published Oct 26, 2023
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In W42 in the pork landscape, the United States Department of Agriculture (USDA) expects global pork production to reach 115.5 million metric tons (mmt) in 2024, relatively unchanged from the 2023 forecast. This steadiness is due to reduced production in the European Union (EU) and China, which would be offset by elevated production in Brazil, Vietnam, and the United States (US). Global pork exports are estimated at 10.4 mmt in 2024, an increase of 2.2% year-on-year (YoY) from 10.1 mmt in 2023. However, global pork consumption is expected to decrease by a modest 0.1% YoY to 114.9 mmt in 2024.

EU pork production is expected to decline by 1.6% YoY to 21.2 mmt in 2024 due to a decreasing breeding herd. The USDA expects weak domestic demand and the lack of new export markets to replace China to lead to sector restructuring in 2024 as producers adjust to fit the situation. EU pork exports are projected to decrease by 25% in 2024 compared to 2019, constituting 15% of total production, down from 19% five years ago. Challenges such as increased regulatory requirements and African swine fever (ASF) have posed difficulties for EU pig producers. Furthermore, Chinese production is forecasted to contract by 1% YoY in 2024, primarily due to sluggish domestic demand, causing substantial losses.

On the contrary, the USDA expects Brazil's pork production to increase by 5% YoY to 4.83 mmt in 2024. This growth is attributed to rising pork prices in key export markets such as Mexico, Singapore, and the Dominican Republic, coupled with an anticipated reduction in pork production costs in 2024. Vietnam's pork production is estimated at 3.7 mmt in 2024, a 5% YoY surge due to post-COVID-19 economic recovery, efficiency improvements, and consolidation in the industry. The US is also expected to increase its production by 2.2% YoY to 12.7 mmt in 2024.

Argentina's pork sector has seen remarkable growth driven by surging pork consumption, even amid nationwide food price inflation. Argentina witnessed a record pig slaughter of 7.7 million heads in 2022, resulting in an output of 723.38 thousand metric tons (mt). This represents a 2.5% YoY increase in slaughter and a 4% YoY rise in pork production. The growth offers the potential for increased domestic consumption and expanding export opportunities. Despite challenges in the domestic market and macroeconomic disparities, pork production maintains a steady upward trajectory. The Ministry of Agriculture reports that 712 thousand pigs were processed in Aug-23, the highest monthly production volume for the month. So far, in 2023, 5.3 million pigs have already been processed, a 4.6% YoY growth. If this pace continues, more than 8 million pigs could be slaughtered in 2023, yielding over 760 thousand mt of pork.

Argentina’s pork production is expected to reach 1 mmt between 2027 and 2028, provided it maintains the average annual growth rate of the past five years. The country has more than doubled its pork production over the last decade and increased by five-fold over the last 20 years. However, despite this production surge, the domestic demand-supply gap persists, necessitating annual imports ranging from 30 thousand mt to 40 thousand mt. Nevertheless, this gap is gradually closing, presenting a promising outlook for increased pork exports in the near future, with the potential to bridge the consumption-production imbalance.

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