Pork Quarterly Q4 2020: Export Concentration a Potential Long-Term Risk
Global pork demand rebounded following Covid-19 disruption in most geographies, yet supply remains constrained in many Asian markets. This imbalance continues to support strong export demand from the rest of the world, resulting in sharply higher pork values.
Globally, processors’ ability to respond also remains constrained by labor availability, which limits packer capacity and efficiency. In Europe, new African swine fever (ASF) outbreaks add further limitations. “Hog producers face a challenging outlook, given rising feed costs, weaker economic trends, and slower export growth as China rebuilds its domestic hog supply,” according to Christine McCracken, Senior Analyst – Animal Protein.
China: Hog prices have moderated with the increase in supply, pressuring margins for producers paying record prices for piglets.
EU-27+UK: Hog markets fell sharply following the discovery of ASF in a wild boar in Germany in September. Subsequent trade bans on German pork exports are forcing a redistribution of pork within the EU and creating additional supply chain disruption.
US: Hog prices are up sharply due to strong exports and tight stocks
Brazil: Exports have grown steadily throughout the year, reaching record levels and surpassing 2019’s full year volumes by August.
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