Since our last AgriTrends, pork prices have shot the lights out and the future view that we generated for our October 2022 report proved to be too conservative around the effect of supply-side factors on prices. Rapidly declining
profits during the end of 2021 and the first months of 2022 initiated herd liquidation in the pork industry. This led to increased supply (see Figure 2.4 with slaughter numbers) which further depressed prices. Herd liquidation supply contracted during the third and fourth quarters of 2022 resulting in rapid price increases. In fact, between March 2022, which recorded the lowest turning point in prices over the last three years, and January 2023, where prices
Herd liquidation supply contracted during the third and fourth quarters of 2022 resulted in rapid price increases
peaked, the price difference amounted to almost 50%. Since reaching highs of R38.50 in the first week of January, prices have however started to ease. Given the large swing in prices and profitability over the past three years, the question is what we can expect for the months and years to come.
Herd liquidation induced price surges in pork towards the end of 2022 Pig Slaughters
Pork to Maize
Elevated slaughter numbers
11,0
360 000
340 000
10,0
320 000
9,0
300 000
8,0
280 000
7,0
260 000
6,0
240 000
5,0
220 000
200 000
4,0
Pig Slaughters
Pork to Maize
Source: Absa AgriBusiness, 2023
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