Global pork production stabilizes, industry returns to profitability

Rabobank’s quarterly report for the second quarter of 2024 indicated a pivotal shift in the industry as sow herd numbers began to plateau after a period of decline. Factors like better-than-expected consumption trends and reduced production costs across most regions contributed to an optimistic outlook for hog prices.

According to the report, conditions are ripe for more producers to rebuild their herds. However, producers in regions with ongoing health challenges or higher regulatory costs may experience a slower recovery pace.

“The industry’s improved supply-demand balance has led to a slowdown in herd contraction,” said Christine McCracken, senior analyst of 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.”

Rabobank noted that the United States, Canada and China are seeing healthier herds, which is translating into greater hog availability.

Also contributing to a boost for the industry, global stocks of grains and oilseeds have run higher, leading to lower feed costs. South America reaped a robust crop that further pressured prices and provided relief from other inflationary costs. The continent’s crop success benefits producers around the world, as South America accounts for roughly 15% of global corn production and 55% of global soybean production. As the Northern Hemisphere approaches the spring planting seasoning, all eyes are on the growing conditions that will influence future feed costs.