Home Indiana Agriculture News Rabobank: Challenging Outlook Ahead for Pork Producers

Rabobank: Challenging Outlook Ahead for Pork Producers

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Hog prices around the world have dropped as a recovery in production has outpaced rebounding demand. A Rabobank report says herd growth will slow in 2022 due to dropping prices, labor shortages, and cost inflation that will put pressure on production margins. These costs will likely get passed on to consumers, which will put downward pressure on demand and consumption levels.

Supply chain disruptions and tight grain stocks around the globe are raising the cost of production at the same time a growing hog supply is driving down prices.

“The most severe impact is being felt in markets that were slow to recover from COVID-19 or that have struggled with trade disruption or disease,” says Christine McCracken, Senior Analyst for Animal Protein at Rabobank.

Limited pricing power and higher costs are also putting pressure on hog production returns, resulting in scaled-back growth plans in many markets. Tighter global inventories of corn and soybeans, together with the recent surge in the cost of fertilizer and chemicals, are likely to increase volatility in feed markets in 2022.

“African Swine Fever remains an issue in many parts of the world, with active cases in China, the Philippines, South Korea, Vietnam, and Europe,” McCracken adds.



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