Renowned analyst Brett Stuart shared his forecast for the global pork market in 2021
In an interview with the US magazine Successful Farming, Brett Stuart, CEO of Global AgriTrends, analyzed the trends and prospects for pork exports in 2021, the impact of COVID on the global pork industry and exports in 2020, and growing markets, among other topics. According to Stuart, US pork exports in 2020 were up 15% […]
In an interview with the US magazine Successful Farming, Brett Stuart, CEO of Global AgriTrends, analyzed the trends and prospects for pork exports in 2021, the impact of COVID on the global pork industry and exports in 2020, and growing markets, among other topics.
According to Stuart, US pork exports in 2020 were up 15% in tonnage and 21% in value, which reveals a positive scenario. USDA data shows that pork exports in 2020 shattered records. This is due to China’s position globally, which has driven that market higher. Talking about the US, he said: “we exported 6.5% of our entire production last year to China. A few years ago that was 1%. The impact is huge. It is not just the direct impact of China buying more pork; it is also opening up markets for us around the world.”
In the expert’s opinion, Chinese hog prices remain very high, suggesting that they are going to continue to be this year. At the same time, he does not see a quick recovery from African swine fever (ASF). “We continue to hear issues about disease as they try to expand. We have a weakening US dollar, which supports commodities and exports. That is in our favor,” he stressed.
When asked about the impact of COVID on the pork industry and exports last year, the CEO of Global AgriTrends said that consumers were forced to buy meat in retail stores instead of restaurants, and plants slowed down during March, April, and May. This caused shortages, which caused soaring prices, which caused huge volatility in both prices and exports. “It looks like we are past that now. As I look at the trade data, the COVID impact is over. As we look forward to a COVID-vaccinated US and world, we can expect to see increased demand,” Stuart pointed out.
Regarding his forecast, he stated that “I have 2021 pork exports forecasted to be down 2%. That may sound a little disappointing, but you have to realize we just went up 15% in a year. If we can hold 13% of that gain, this would be a great victory. I think we can.”
The renowned international analyst said that “China and Hong Kong accounted for 16% of US exports in 2020. The main reason is that last spring we had a huge surge in demand by China/Hong Kong just for three months. Chinese prices suggest the market is oversupplied. I know they are expanding, but they have a big hole to dig out of after African swine fever.”
Regarding the recovery of the US packing industry, Stuart thinks that “we are not recovered. We have been able to get all the hogs processed, but our real challenge now is having the labor to do the value-added work. We do not have the labor to pull all the offal that we could export to China. While we have caught up with the hog supply, we are still understaffing in terms of our value-added products, which is a real frustration in our current hog market.”
Stuart also talked about other countries trying to grow their exports this year, such as Mexico, Japan, and South Korea. “We are tariff-free now on pork into South Korea, which is a big advantage. Where we really succeed is where we are duty-free. We are approaching a point where we are going to be duty-free in Latin America, south of Mexico. They are small markets, but when you add them all together, they are important,” he pointed out.
Talking about farmers and their situation in 2021, Stuart said that we are in the beginnings of a commodity super cycle. He explained that corn and soybean prices are going through the roof and there is an incredible Chinese demand for corn right now. Currently, China is driving global markets for beef, pork, poultry, corn, and soybeans. Therefore, 2021 is expected to be a year where all major commodity markets will be driven by the Asian power. “With this weakening dollar and the COVID recovery, we are going to see a boost broadly to the global commodity markets. Of course, higher pork prices are not as great when you have higher corn and soybeans prices, but it sure feels like the tailwinds are blowing into the US pork market in 2021.”