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RaboResearch calling for weaker near-term pork returns

A pork analyst is expecting weaker returns for producers in the second half.

Christine McCracken with RaboResearch tells Brownfield domestic demand has been slow over the summer.

“The consumer is just being a little bit more careful when they go out to restaurants trying to cut back and I think that that’s been a big challenge.”

McCracken says the U.S. could also see more competition on the global market from Brazil.

“We’ve seen big increases coming out of Brazil now,” she says. “There still small, but they’re low cost and obviously have access to a lot of markets including China, and we expect to see that market continue to grow as we look forward, and they’ll be a big competitor for the U.S.”

RaboResearch projects Brazil to reach a new export record next year with increased demand from Southeast Asia.

McCracken says pork liquidations could continue in the second half of this year as producers work to offset increases in productivity.

Longer term, she says pork is likely to benefit for more conscience consumer spending.

AUDIO: Christine McCracken, RaboResearch