The volume and price drivers of the global pork industry are changing, according to Rabobank’s Global Pork Quarterly report for the second quarter of 2017.
Traditionally, the global pork industry was relatively straightforward; produce as much pork as possible and sell it to the highest bidder globally, the report said.
Productivity, volume and price of an increasingly ‘lean’ product were the key variables. This resulted in an interchangeable commodity product and growing competition, it added.
Some farmers were reportedly not happy with the volume and price ‘squeeze’ resulting from this traditional approach. Food safety scandals also increased retail and food-service demand for improved product tracking and tracing, the report said.
Social media was cited as the platform that allowed these scandals to reach cities across the developed and developing world.
‘Favourable global pork market set to continue’
The favourable global pork market is set to continue well into 2017, according to the Rabobank report.
“The overall outlook is positive right now. The demand market will continue throughout Q2, supporting margins along the supply chain,” Global Strategist for Animal Protein at Rabobank, Justin Sherrard, said.
The report for the second quarter of 2017 added that the European pig market is ‘booming‘; with rapidly rising prices due to pressured supply. This situation is expected to continue towards summer, with record piglet prices during the first quarter of the year.
Exports remain the wild card for the market’s price top, with high prices limiting the competitive position and resulting returns, it said.
The South American country is ‘steadily growing‘ its position in pork export markets; with rising volumes flowing into all main destinations, especially China, the Rabobank report added.