Inflationary pressures and other global uncertainties are prompting pork companies to carefully manage production in the fourth quarter, according to a new report from Rabobank.
Pork processors have already built inventory to satisfy a modest rebound from the third quarter. Holiday sales of pork products are expected to test the market’s resilience and its ability to absorb premiums, the Rabobank analysis noted. Value-conscious consumers already are seeking out lower-value cuts and trading down from branded to private-label alternatives at retail, adding to further weakness to premium product markets, the report added.
Rabobank analysts also predicted that weaker economic growth expectations will likely impact pork trade volumes in the fourth quarter and into early 2023. With inflation still outpacing wage growth, lower real wages also are expected to negatively impact overall protein consumption in the current quarter and into the first half of 2023, the report said.
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