Market Trends of processed pork meat Industry
The prevalence of a variety of infectious diseases in the pig population affects production
- Global pork production saw varied growth during the study period, increasing at a rate of 0.90% in 2021 compared to the previous year. Asia-Pacific is the largest pork-producing region in the world, representing 53.36% of the total global production volume in 2021. In Asia-Pacific, China produced the most pork, i.e., 55.04 million tons in 2021, accounting for over 45.5% of the total global pork production. In 2021, China's pig slaughter volume reached 609 million heads, a steep rise from the slaughter volume in 2020, which was only 469 million heads. Similarly, Vietnam produced 2.59 million tons of pork in 2021. Other leading producers are the United States (12.31 million tons), the Rest of Asia-Pacific (6.96 million tons), and Germany (5.20 million tons).
- The volume declined by 1.69% from 2018 to 2019, primarily due to the effects of ASF, which impacted global pork production. ASF is a highly contagious and deadly swine disease that can affect farm-raised and feral (wild) pigs and has high mortality rates (95-100%). In 2019, about 225 million pigs in China either died or were culled due to the outbreak, and almost 25% of the global pig population died from ASF during 2018-2019. Although the ASF virus was discovered about a century ago, no commercial vaccinations or treatments are still available. ASF also led to livestock deaths in Europe, Asia, and Oceania.
- Europe is the second-largest pork-producing region globally, contributing over 24% of the total global pork production in 2021. Germany was the largest pork producer in the region in 2021, with a pork volume of 5.20 million tons, followed by the Rest of Europe (4.49 million tons), Spain (4.45 million tons), Russia (3.68 million tons), France (2.22 million tons), and the Netherlands (1.66 million tons).
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Rising input costs and inflation are leading to a spike in prices
- From 2017 to 2022, global pork prices grew by 8.50%. Concerns about food affordability and safety, as well as volatile and rising post-COVID-19 pandemic pork prices, are the main drivers behind the rise in retail pork prices. Significantly higher feed costs, accompanied by a 79% surge in corn prices and a 42% increase in soybean meal prices from 2020 to 2022, along with increasing fuel, transportation, packing, and retail costs, have contributed to incremental cost rises. Many of these marginal costs result in changes in farm, wholesale, and retail pork prices.
- In US retail, pork prices increased in the second half of 2021 and remained elevated until 2022. The Bureau of Labor's consumer price index showed pork prices rising 15% Y-o-Y, twice the rate of US inflation. This has been a significant leap in the last 20 years. On average, pork prices rose by 2% annually, while beef prices rose by 18.6% and chicken prices rose by 10.4%. Prices of various pork products in the United States in 2022 were USD 6,224/lb for bacon, USD 4.24/lb for pork chops, and USD 4.44/lb for ham. The hog prices may continue to grow due to the rising costs of production, transport, energy, and feed caused by the conflict in Ukraine and logistics-related issues. The liquidation of the swine population and the low supply of livestock are also leading to a lack of profitability in Europe. Therefore, a low supply of pigs may favor the higher purchase prices in the region during the forecast period. In Q1 2023, pig meat production witnessed an 11% Y-o-Y decline in the United Kingdom and an 8% drop in EU production compared to Q1 2022. Consequently, prices have remained elevated, with substantial increases observed in both the UK and European markets since the start of the year.
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