Geopolitical tensions disrupt trade flows in the pork market

Despite changes in trade flows and other economic and consumer uncertainties, pork prices recovered due to limited supply. Continued HEALTH and productivity concerns limited sow herd growth. RaboResearch also noted that the slow production response reflects market uncertainty caused by the deteriorating economic growth outlook.

"We expect limited improvement in demand through the end of the year," said Christine McCracken, senior animal protein analyst at RaboResearch. "High beef and poultry prices, as well as the expected shift in consumer spending from foodservice to retail (where pork is typically in high demand), could provide additional support."

According to RaboResearch, rising geopolitical tensions have had a limited impact on global pork markets so far, but they are likely to change the direction of global trade volumes in the coming months.

Although the US and CHINA recently reached an agreement to significantly reduce tariffs within 90 days, additional tariffs on US pork could still restrict trade.

"For the Chinese pork sector, this development is likely to support prices, while alternative suppliers such as the EU , Chile and Brazil could also benefit," McCracken said.

Chinese importers who previously relied on American pork will likely face margin pressure. Meanwhile, American pork importers are expected to see a drop in the cost of by-products. With China being the primary market, secondary markets are scarce, potentially resulting in millions of dollars in lost U.S. EXPORT revenue annually.

"Given the uncertainty surrounding future U.S. trade policy, investment in expanding the U.S. pork sector is expected to slow, while growth may be slightly faster in other regions," McCracken said.

Trade tensions could also impact commodities, particularly soybean meal. Reduced oilseed exports from the US could lead to lower feed costs for American pork producers, partially offsetting the export losses.

A bumper harvest is expected in South America this year as the Northern Hemisphere accelerates corn and oilseed plantings, providing a tailwind for lower food prices .

However, various geopolitical shocks will continue to impact global grain and oilseed trade. These factors include US DOLLAR volatility, the ongoing trade war between the US and China, and signs of a possible resolution to the war between RUSSIA and Ukraine.

RaboResearch notes that increased grain supplies and rising stock levels should help keep food prices manageable.

"Our baseline commodity price scenario assumes relatively stable feed costs through 2025," McCracken said. "However, geopolitical events and climate uncertainty remain key risks."

Production constraints are exacerbated by livestock health problems in key regions. According to RaboResearch, in some cases, animal diseases even reduce demand.

The foot-and-mouth disease outbreak in the European Union in the first quarter of 2025 had a significant impact on pork production. This outbreak was the first in decades. New cases were also reported in SOUTH KOREA.

Authorities attempted to bring the outbreak under control through containment zones, enhanced surveillance, and travel restrictions. These mitigation measures are gradually being lifted due to the lack of new outbreaks.

Additionally, producers across Asia and Europe are battling African swine fever ( ASF ). The ASF outbreak has resulted in ongoing production losses and trade disruptions as countries work to contain the spread of wild boar populations.

Porcine reproductive and respiratory syndrome (PRRS) is another problem for the pork industry, negatively impacting production in parts of North America and Europe. However, earlier this month, the U.S. Food and Drug Administration (FDA) approved the use of PRRS-resistant pigs in the U.S. food supply chain.