Weaker economic growth is beginning to take a toll on global pork consumption, according to Ranobank's Q2 Global Pork Quarterly report. Despite early signs that the worst of the inflationary impact may have already passed, the lagged impact on consumption is likely to be felt throughout 2023.

In a slowing economy pork remains well-positioned, as demand for the protein is historically less income-sensitive than more expensive proteins like beef and premium seafood. Nevertheless, Rabobank sees persistently high retail prices limiting consumption of all proteins. Consumers will continue to conserve capital by shifting everyday purchases to lower-value protein options, switching channels, and moving to smaller pack sizes, according to the report.

Industry optimism in 2022 following a notable upward shift in pork consumption (and prices) in some markets and expectations of a 2023 recovery of pandemic-restricted consumption in others contributed to planned supply growth in 2023. That growth will take time to curb. Slowing supply in Europe will help balance the industry, yet high costs of production and limited consumer support will require a more conservative approach to production to preserve capital.

Although a modest improvement in production costs is expected in 2023, local conditions will vary and risk management will remain critical to success, Rabobank said. Global feed stocks are at historically low levels, and availability remains tight. A disappointing Argentine harvest will partially offset Brazil’s record 2023 soybean crop, and the small global cushion in grain and oilseed stocks is expected to drive additional feed cost volatility in 2023.