Rabobank’s Q2-2023 Global Pork Outlook is forecasting the more economically-priced pork will win with consumers.
By Andrew Joseph, Farms.com, with files from Farms.com Risk Management’s 2023 Q2 Global Pork Outlook by Moe Agostino—Chief Commodity Strategist—and Abhinesh Gopal—Head of Commodity Research—and the Commodity Research Team.
In the recently released Rabobank Q2-2023 Global Pork Outlook report, it is forecasting a shift in protein consumption, lower feed availability, and a rapid improvement in pork productivity for Q2 2023 and beyond.
Rabobank is a Dutch multinational banking and financial services company headquartered in Utrecht, Netherlands.
In its report, it said that the ongoing global lower economic growth would affect pork consumption and the pork processing sector.
With reports of a recession on the way, and with high retail prices for food and other goods, consumers are looking to save money—and the easiest way to do that in the mind of the consumer is to reduce the consumption of high-priced proteins.
While not likely to give up meat proteins completely, consumers are moving to smaller pack sizes while using other foods to take up the slack.
However, despite the consumer looking to save money, the lower-priced option of pork means it becomes more of a purchase option.
Hog prices in the US have dropped by 20 percent from the levels seen in 2022—the average weekly slaughter runs above 2.4 million through March 2023, and year-to-date slaughter is up by 1.4 percent year-to-year.
The consumer demand for pork loins, ribs, and holiday hams also saw a decrease, which has caused a nine percent year-to-year increase in cold storage inventories, with a notable 42 percent year-to-year increase in pork bellies.
Rabobank suggested that in the US and Canada, the so-called grilling season would see the lower pork prices help stabilize pork consumption in the two countries.
It is expected, however, that the US pork exports will remain competitive in key global markets, but suggests that its hog production growth will slow as consumption softens, and the losses become more sizable.
According to the latest quarterly report from the USDA on hogs and pigs, US inventory as of March 1, 2023, was at 72.9 million head—up slightly from March 2022, but down by two percent as of December 1, 2022.