In April, Rabobank released its second quarterly report for 2022. Similarly, the United States Department of Agriculture (USDA) issued a report with this year’s global outlook for meat.
The trading scenario in the poultry and pork sectors is facing various challenges as a result of the global situation being defined by the pandemic and war. Record-breaking inflation, logistical disruptions, and uncertainty will undoubtedly affect numbers and results.
The USDA report forecasts that global pork production will be 3% higher in 2022, primarily due to Chinese hog inventories grown in China, where production is expected to be 7% higher than 2021. Global pork exports are expected to be 4% lower, mainly because of the contraction of Chinese and Philippine imports, which are forecasted to decline around 18%.
In relation to the Chinese market specifically, the USDA expects the Asian giant’s pork imports to fall nearly 20% this year, as opposed to markets that are showing increases: the United Kingdom, Japan, South Korea, and Australia.
Meanwhile, Rabobank’s 2022 second quarter report expects global pork trade to decline in 2022, driven by weaker economic trends and ample pork supply. The experts describe a “context marked by rising costs and the slowdown in production and global trade, with the added uncertainty regarding how consumers will respond once higher costs are passed on to them.” According to the report, producers will focus on efficiencies and limit herd growth.
Regarding consumer demand, pork sales remain dynamic in the US and South Korea, while sales have lagged in countries like China, Japan, and Mexico due to Covid-19-related dining restrictions and weaker economic growth.
Regarding chicken production, the USDA report expects production to remain virtually unchanged in 2022, with Brazil expected to have the highest increase in production to backfill the global demand vacated as Ukraine meat exports come to a halt. Chinese production is forecast to be lower as pork production continues to rebound.
In chicken global exports, the USDA report forecasts figures close to 13.4 million tons, with Brazil again being the country with the highest growth. Imports by Ukraine, Russia, and Saudi Arabia will decline in 2022, while modest growth is expected for the United Kingdom, Iraq, Cuba, and Mexico.
Meanwhile, Rabobank highlights that in most regions, poultry supply is relatively tight and prices are strong. The war in Ukraine has led to an increase of 20% to 40% in global grain prices, and the poultry industry will be challenged to produce with these higher costs.
As for global trade, it is expected to “remain strong in 2022, as all governments gradually implement ‘living with Covid-19’ strategies, thus increasing food service demand.” The challenge for global poultry industries is having a “sharp focus on operations to offset higher cost and supply challenges: optimal procurement, product efficiency, and feed formulation will be vital.”
Rabobank Report:
https://research.rabobank.com/far/en/sectors/animal-protein/pork-quarterly-q2-2022.html
