Continuing High Feed Costs Make Pork Supply Discipline Key Success Factor

Global pork prices started 2013 at historically strong levels, but Rabobank anticipates some weakness in prices in late Q1 and into Q2 due to pressures on production and limited growth in global consumption levels.

2013 pork prices will be impacted by swing factors including; how much European production will decline due to sow pen regulations, China’s appetite for import, and whether US production will continue to expand, despite the spike in feed costs. The pace of pork demand growth is the key unknown for industry margins in 2013, and is highly dependent upon economic growth in the developing world.

Global pork prices started 2013 supported by strong Chinese demand ahead of the Chinese New Year in February. However, price movements in China will be a key indicator for the year as we move into Q2 as Rabobank expects global pork prices to come under slight pressure due to production growth in China, the US, Brazil and Russia being higher than the growth in global consumption.