Global Pork Production Profitability Returns, But Risks Remain

The global pork industry is witnessing a pivotal shift as sow herd numbers begin to plateau after a period of decline. This stabilization is a result of better-than-expected consumption trends coupled with reduced production costs across most regions, Rabobank says in its recent quarterly report.

"These factors are contributing to a more optimistic outlook for hog prices and are encouraging producers to consider rebuilding their herds. However, producers in regions with ongoing health challenges or higher regulatory costs may experience a slower recovery pace," the report says.

1. Supply-demand equilibrium slows herd contraction.

After several months of decline, sow herd numbers are beginning to stabilize in key regions. Rabobank says changes are tied to the impact of disappointing returns, structural shifts in capacity, disease, added regulatory costs, and improved productivity.

“The industry’s improved supply-demand balance has led to a slowdown in herd contraction,” says Christine McCracken, senior analyst – animal protein at Rabobank. “Although meaningful growth in the breeding herd is not anticipated until late 2024 or early 2025, productivity enhancements are contributing to increased production.”