Chenjun Pan, Senior Analyst for Animal Protein with RaboResearch recently published an overview of the world `hog industry. Consumption of pork and world trade has a direct impact on U.S. broiler exports since the markets are closely related. Ms. Pan commented that feed and energy costs are declining in some markets but will stay high for the remainder of 2022. On the consumer side of the equation, demand will be mixed remaining strong in North America, the EU, South Korea and Japan. It is anticipated that with a slowing economy during the second half of 2022 demand may decline with considerable uncertainty over China.
Currently in China hog prices are rising due to an imbalance between supply and increasing demand. It is anticipated that the Government will intervene in an attempt to stabilize prices.
Hog production remains profitable in North America despite relatively high feed costs, but demand may fall with if the economy enters a recession with unemployment. This does not seem probable given job vacancies despite a fall in consumer spending.
In Brazil, margins are improving, but exports have declined given the reliance of Brazil on China. In most nations in Southeast Asia, African swine fever is uncontrolled since there is no effective vaccine, requiring increased imports to compensate for the shortage.