Rabobank: US & Mexico Pork Market Forecast
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Prospects for the US Pork Market
Pig prices in the US are down 20% year-over-year due to lower demand from processors in light of ample production and reduced pork consumption. Rabobank expects slaughter rates in the second quarter to be lower year-over-year and prices to remain stable. Manufacturers are currently operating at a loss, but Rabobank predicts they will turn a profit in the second and third quarters before returning to losses at the end of 2023.
Pork prices are declining along with declining consumption. Cold store inventories were up 9% year-over-year, with storage space up 42%. Rabobank expects lower pork prices should help stabilize pork consumption during the upcoming summer grilling season.
In February, pork EXPORT volumes rose 11% year-over-year to 219,729 metric tons, with export values up 10%. Imports of pork in physical terms decreased by 18%. Rabobank expects exports to increase by 3% in 2023, given the competitively low prices of U.S. pork in the global market.
Prospects for the Pork Market in Mexico
Mexican hog prices are 15% below last year due to abundant supply, weak demand from slaughterhouses and low pork consumption. Rabobank says steady imports of cheap pork are also putting pressure on the market.
Despite some reduction in feed costs, most producers operate at a loss. Rabobank expects production growth to slow given the current supply imbalance, although higher chicken prices could help stabilize prices.
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