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Outlook Hinges on Increased Exports
Over the past decade the U.S. hog and pork industry has gone from lagging production with tight margins to a production recovery phase. In a new report from the RaboResearch Food and & Agribusiness group, analysts take a look at the potential growth of the pork industry and the factors determining the growth.
Rabobank’s analysis shows the U.S. pork industry will continue in expansion mode through to 2025, supported by increased production efficiency and additional processing capacity, which also have the potential to improve margins along pork supply chains.
“Exports are necessary for future expansion but are not guaranteed,” notes RaboResearch Food & Agribusiness, Global Data Analyst Sterling Liddell. “Mexico continues to grow its sow inventories and slaughter plants, making it only a matter of time before Mexico boosts domestic production.” The report finds that during this transition period in the pork and hog sector exports, efficiency and slaughter capacity will be the determining factors between stagnancy and expansion.
“Geopolitical issues affect the global pork trade,” explains RaboResearch Food & Agribusiness, Global Animal Protein Strategist Justin Sherrard. “Specifically, U.S. pork meat exports to certain markets such as Mexico and China are likely to face domestic competition as production in those certain countries is expected to increase.”
It is critical, for producers to understand supply, demand and the potential for increased market volatility.