Price crisis on the pig market will continue next year

The disruption in the meat market this year will continue in 2022, Rabobank expects in its annual report Global Animal Protein Outlook. Traditional meat companies that are not flexible will have a hard time. It is striking that the bank is very gloomy about the situation on the world market for pigs.

The bank signals cost inflation in the meat and fish chains in 4 areas. The prices of animal feed, labour, energy and transport have risen sharply in recent months. This presents major challenges for many companies in the animal protein chain. Companies that are agile and resilient have the most opportunities, according to the bank. This by responding quickly to changing consumer trends and consumption patterns, prompted by sustainability and the corona crisis.

Companies that are not flexible will have a hard time, with which the bank points out a number of 'open doors'. Further automation could be an answer to the labor shortage. However, in meat processing, where robotization is not easy to implement, this is complex.

Pork prices continue to fall
When we zoom in on the meat market, the bank is quite negative about pigs. A continued oversupply of pork on the world market is likely, as production in China continues to increase and therefore imports less meat from Europe, the United States and Brazil.

It is therefore likely that pork prices will continue to fall in 2022. This sends the bank a bad message for pig farmers who have been confronted with a persistent price decline for some time. Disruptions from African swine fever remain, although the negative impact of this is weakening, according to the bank.

Opportunities for chicken, beef and fish
The bank expects stable prices for the beef segment, prompted by a tight supply and good sales opportunities worldwide. In the United States, the bank foresees a further production decline in 2022 and 2023, which started in 2019. The number of cattle slaughters in the US is expected to fall by 2,5%.

In the poultry meat market, a production increase of approximately 2% is expected, prompted by the good demand on the world market. However, demand will continue to pick up in 2022, which will help to absorb the increase in production. The fish market also has good cards in its hands. Salmon benefited from increased home consumption in 2021 and now that sales are rising again, demand is only increasing. An increase in production is therefore no problem.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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