Rabobank says hog prices are sharply higher in many markets worldwide as processors are scrambling to find adequate supplies. Higher disease losses in key growing regions, along with the lagging impact of industry liquidation brought on by COVID-19, have limited available hog supplies.
“African Swine Fever has proven harder to manage than initially expected in some regions, slowing herd rebuilding efforts in Asia and shifting trade expectations for the rest of the world,” says Christine McCracken, Senior Analyst for Animal Protein at Rabobank.
Higher disease-related losses in parts of North America are also contributing to the supply shortfall in the U.S. and Mexico. The re-emergence of Classical Swine Fever in Japan and Brazil is currently expected to have a limited impact on production but still brings new risk to the markets.
“We expect a gradual recovery in the herd, yet higher costs of raising animals and demand uncertainty are expected to moderate the pace of growth,” McCracken says.
Higher costs in raising hogs are contributing to production slowdowns in certain regions, as the price of feed is up 35 percent year over year. Lower production expectations have left the market short of pork, just as demand is getting stronger.