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Rabobank says hog market “cooling down”

Rabobank

Rabobank has published its quarterly Global Pork Industry Report and it says “the heated international markets are slowly cooling down.”

The bank’s Food & Agribusiness Research team says that, although the peak of the porcine epidemic diarrhea virus (PEDv) outbreak is past, the global pork industry faces another challenge from Russia’s import ban.  That ban is affecting EU, U.S., and Canadian markets resulting in “a rapidly changing trade landscape.”  The report says Brazil is benefiting from the ban and their pork prices are up 30 percent.  Meanwhile EU prices have dropped 9 percent.

Canada has also been hurt by the ban as third-quarter prices fell due to increased competition from other markets.

Despite the ban, U.S. producers have fared quite well as PED-reduced numbers and high beef prices along with low feed prices have led to some of the best margins in history.  Hog numbers are expected to increase although there is the possibility of a PED resurgence over winter.

Mexico was hardest-hit by PED, slaughter numbers are down 11 percent but feed is cheap and prices are good so numbers are expected to rebound.

Rabobank expects demand to rebound in China leading to growth in imports but also increased domestic production.  The report says with declining feed costs, “Chinese hog farmers are expected to finally make money.”

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