World pork production led by China, the EU, and U.S. has declined and is not expected to improve for the next year.
Chinese situation
Pork prices in China have stabilised this year and the expectation is that it has peaked and higher prices in the short to medium term are not expected, neither is a reduction in price. China is set to increase pork imports in the coming months after losses for farmers last year caused a reduction in hog output, while pork supplies have been steadily increasing again this year with more product entering the market recently combined with the Chinese government releasing several strategic reserves to combat inflation. Pork prices had more than double this year.
Interesting data: 2.3% of U.S. pork production currently goes to China. Chile and Brazil ship 17% of their pork muscle cut production to China, while China accounts for 9% of Canada’s production and 6% for the European Union.
Read: Trending Protein Trade News
US Situation
Consumer prices are significantly higher with little expectation of it lowering any time soon. Feed and labor costs continue to rise, and many in the pork industry are turning to lean hog or pork cutout futures to manage risk. Non-feed variable costs have risen 28% for producers in 2022. Grain costs were up last year and continued to rise in 2022. A drought in the western-U.S. Corn Belt reduced yields, while the war in Ukraine had an impact on grain prices, too. Feed costs account for about 56% of total production costs.
UK Situation
The UK produced 85,900 tonnes of pork in October. This is 1,200 tonnes (1.4%) more than in September, but 900 tonnes (1.1%) less than in October 2021. Weekly slaughtering numbers are expected to decline as the year goes on.
Read: Trending Protein Trade News
European Situation
Pork has been banned from importation into the Bailiwick from Europe, excluding the UK, due to African Swine Flu outbreak.
Interesting data: 2.3% of U.S. pork production currently goes to China. Chile and Brazil ship 17% of their pork muscle cut production to China, while China accounts for 9% of Canada’s production and 6% for the European Union.
Company News
Tyson Foods’ pork division continued to struggle in the most recent quarter, capping off one of the company’s worst years ever. The pork division of the meat giant with a dominant presence in Iowa lost $55 million in the quarter ended Oct. 1, Tyson said in a report Monday. The Arkansas-based company’s profits fell as the cost of hogs, transportation and wages rose.
In addition, U.S. pork exports have declined over the past two years, as has domestic consumption. Operating income for the Company’s pork division was $193 million for the year ended October 1, compared with $328 million for the same period last year. The operating margin is 3%, one of the least efficient in the company’s history.
Alltech Opens First Organic Mineral Production Facility in Vietnam. Alltech’s eighth mineral production facility in the world is also the first organic mineral production facility in Vietnam. The factory will have a production capacity of 7,000 tons per year, potentially creating 100 new jobs, and will not only serve local customers, but also support import and export activities. Backed by over 21 years of research, Alltech’s “Bioplex” minerals aim to provide superior bioavailability to inorganic minerals.
WH Group has started to reorganize its business by selling seasonal units in the US and looking to expand our presence in the European market through acquisitions to reduce its dependence on the US and China, which is approximately 90% of its turnover.
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