Rabobank: Pork prices moderate in first quarter
Supply growth has outpaced subdued demand for pork
The global pork industry searched for stability during the first quarter of 2015, with strong supply growth and relatively weak demand driving the market, Rabobank stated in its pork quarterly report for the second quarter. The report was released on April 17.
Pork prices are sharply lower, as robust global supply growth, which has been driven by the United States, Russia and Brazil, has outpaced rather subdued demand, dragging producer profitability into negative territory, the bank reported.
Rabobank animal protein analyst Albert Vernooij said: “The increasing competition in the global export market will result in continuous price and margin pressure in most countries around the globe. Therefore, after the buoyant — at least price-wise — last couple of years, the global pork industry is slowly moving towards the bottom of the cycle.”
U.S. pork outlook
In the U.S., as supply recovers after porcine epidemic diarrhea (PED) virus infection, the question is as to what degree recovery will be coupled with the strengthening U.S. dollar and lower prices.
EU pork outlook
In the EU, prices will follow seasonal developments, but will remain lower than the historical average and below break-even level.
Brazilian pork outlook
Brazilian prospects remain positive, but less buoyant than in the first quarter, driven by pressured domestic consumption and difficult Russian export negotiations.