Rabobank Forecasts Hog and Pork Market Trends for 2023: Higher Prices and Declining Supplies Expected

With the Fourth of July holiday weekend nearing and the upcoming Hogs and Pigs inventory report set to come out on June 29, Rabobank shares key insights to the hog and pork markets for the remainder of 2023 and into next year.

Hog Prices

Seasonally tighter supplies and clarity and visibility on California’s Proposition 12 implementation has lead to recently higher hog prices, Rabobank notes in its North American Agribusiness Review for June 2023. With weekly slaughter down 1% year-over-year and lighter weights, down 1.6% from last year, reduced production since late May has helped stabilize prices.

Producers might expect to see a rebound in prices and a gradual decline in feed costs in the near-term, according to Rabobank’s outlook. Additionally, contraction in the sow herd is expected to begin in the second half of 2023. Additionally, depressed returns will likely support lower farrowing intentions in the upcoming Hogs and Pigs inventory report.

Rabobank expects at least a 7% decline in the U.S. sow herd over the next 12 to 18 months will be needed to restore herd profitability.

Pork Prices

It’s been a slow start to the grilling season, with pork cutout levels 20% below last year. Specifically, belly prices are 46% lower, loins down 17% and ribs down 36% year-over-year, while hams have seen “modest improvement” from depressed levels earlier this spring.

Rabobank reports the lack of retail promotions and the resulting higher pork prices have caused the slowed consumption this spring. With pork remaining a good value to retailers compared to more expensive proteins, as well as the improve visibility on the implementation and enforcement of Prop 12, Rabobank expects retailers to feature pork more frequently which will help drive sales over the summer.

Additionally, large cold storage pork inventories, up 6% YoY, are expected to decline throughout the remainder of the summer, and pork prices should continue to see improvement in the second half of the year, provided the expectations of lower production and improved consumption and exports are realized.

Pork Exports

Overall, April pork and pork variety meat exports were up 10% in volume and up 7% in value from last year, Rabobank notes. Specifically, China/Hong Kong increased volumes by 26%, South Korea increased 43% and Mexico grew 5% YoY, while Japan fell 2% and Colombia down 41%.

Additionally, pork imports from all destinations dropped 33% in volume, Rabobank reports, with currently forecasted 2023 export growth to reach 8% YoY, given the low relative cost of U.S. pork in global markets.

Tags: China, South Korea, Mexico, USA, Colombia, Japan