Source: Jennifer Shike, Farm Journal’s Pork, 17 February 2022, photo credit: 123RF/parilovv
Even though US pork export tonnage was down 2% last year, experts agree 2021 outperformed most expectations. Still, with uncertainty in the marketplace today – volatility, heavy inflationary environment, uncertainty around COVID-19, unanswered questions about China – can the 2022 forecast hold promise for growth in export markets?
Brett Stuart, economist and co-founder of Global AgriTrends, believes it does.
“Maybe I’m an eternal optimist. It’s hard for me to ever forecast the negative number, but I did last year. This year, I’ve got pork exports up 2%,” Stuart says.
Here’s why.
US hog farmers lost a little money in December, and have experienced some tough prices and tough margins, Stuart explains. However, the U.S. is seeing prices increase.
“If I look at Brazil, China, Europe, the other major hog production bases, they’re all losing money,” Stuart says. “And they have been for a substantial amount of time.”
By his estimates, Chinese hog farmers have been losing money for seven months straight.
“In the US, if your margins go negative, you always have that tough decision of do I go leverage my land? Do I go put some collateral down and keep feeding hogs? In China that’s not an option because no Chinese hog farmer owns their land. It’s owned by the government,” Stuart explains. “Chinese hog farmers just don’t have the ability to step in and leverage and keep going when they lose money.”
That’s why in the Chinese hog cycle, when farmers lose money, the first thing they usually do is sell sows to keep feeding the pigs they have.
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The South African Pork Producers’ Organisation (SAPPO) coordinates industry interventions and collaboratively manages risks in the value chain to enable the sustainability and profitability of pork producers in South Africa.
