Rabobank report: Steady growth ahead for U.S. pork

In a new report, Rabobank states that the U.S. pork industry is projected to continue in expansion mode through 2025, with exports increasingly being the most important component of demand. To remain in this profitable expansion mode, the US will need to increase pork exports by 400,000 tons.

During the last decade, there was an inflexion point in the U.S. hog and pork sector, moving from sluggish production and tight margins to a production recovery phase incentivized by positive margins. Many factors were involved in this dynamic transition: the rise and then fall of feed costs; the Porcine Epidemic Diarrhea virus (PEDv) outbreak, recovery, and aftermath; the improvement of consumption; and the rise in export demand.

“Now, the US pork industry is set to grow steadily through 2025,” according to Sterling Liddell, Senior Analyst – Global Data Analytics. “Increased production efficiency, through carcass weights and pigs per female, are key drivers of the expansion.” An increase in processing capacity removes a bottleneck that periodically limits the flow of pork to consumers. Domestic consumption per capita is expected to grow slightly, but only within historical bounds. U.S. demand for specific primal pork cuts is projected to create periods of high volatility in the short term.

The result of these substantial changes in both volume and efficiency on the supply side, and product specification and destination on the demand side of the pork industry, is an industry that faces significant change in both the short and long term. Rabobank’s baseline outlook identifies three key areas that need to be considered in strategic plans over the next ten years: the need for intensive risk management systems that include volatility, the impact of new domestic competition on the packing industry, and changes in U.S. consumption patterns.

Exports are increasingly the most important component of demand for US pork. To remain in a profitable expansion mode through 2025 (and considering supply-and-demand baseline prospects), the U.S. will need to increase pork exports by 400,000 tons. By 2025, Rabobank anticipates exports to increase by around 100,000 tons to China, over 200,000 tons to Mexico, and the challenge will be to find an additional 100,000 tons of export in the global market.

Click here for more information about Rabobank’s report.

Source: Rabobank

You must login or register in order to post a comment.

The Meat Industry Hall of Fame was created in 2009 to enshrine the leaders and legends whose visions, skills, and dedication have shaped and sustained the meat and poultry industries.

This new annual reception will celebrate the Meat Industry Hall of Fame Class of 2023 inductees in person during the AAMP American Convention of Meat Processors & Suppliers’ Exhibition in Omaha, Nebraska.