Pork – Procurement Best Practices & Sourcing Strategies

DESCRIPTION

Pork Market Global Size:

The constant transition in people’s eating habits is responsible for the massive expansion of the pork meat business. ELINT Market Research evaluated 124 Mn CWE global supply for the pork market in 2023. Additionally, growth in the retail industry made the purchase of packaged pork meat easier for consumers; they can go through a variety of sales channels i.e., offline or online to buy hog meat goods. Thus, the sales figures of the pork meat industry are touching new heights constantly and its consumption value reached 113 Mn CWE in 2023 as per the procurement market analysis report.

Moreover, the study reveals that ending stocks of the global pork market calculated at 774 thousand metric tons (MT) in 2023 when compared to the previous year 2022’s stock numbers. Hence, a rise has been detected in the inventory of pork goods which is a good indication of a constant supply of products. Furthermore, the United States’s pork stock was also expanded in 2023 and calculated at 234 thousand MT due to favorable weather conditions.

Additionally, another country that experienced appropriate weather situations for the vast production of pork was Russia in 2021. Conversely, the European Union underwent adverse weather conditions in the same year which impacted the inventory and production rates of pork.

Market Definition:

Pork is probably the most broadly and popularly consumed meat product in the world since it is less expensive than other animals’ meats. Hence, high consumption is noticed in the global pork industry since people across several cultures consume pork as their main source of protein. Moreover, frozen hog meat is becoming more and more widespread as today’s busy generation has a habit of eating out of the house and that’s why, they purchase pork goods from online platforms.

Pork Market Drivers:

1. Demands for Clean Lable Pork Goods –

Growing consumer interest and awareness about clean-label and sustainable hog meat foods is anticipated to present profitable growth prospects for the worldwide pork meat industry since individuals are concerned about their health.

2. Rise of the Food and Beverage Industry –

Another key reason for the development of the pork market is the expansion in the global food & beverage industry which is continuously trying to fulfill evolving consumer requirements for pork goods.

Pork Market Challenges:

1. Russia-Ukraine War Results –

Because of the Russia-Ukraine crisis, the pork market experienced a surge in feed costs and logistics costs, which drove market players to invest in higher capital.

2. Lower Farrowing and Capacity Cuts –

Lower farrowing rates have been seen in the pork sector which signifies a reduced count of births of piglets, which automatically contributes to less production. Further, pork manufacturing firms are sometimes required to implement capacity cuts depending on market shifts which causes less production.

Pork Market Opportunities:

1. Adoption of Organic Meat –

A higher degree of adoption has been detected for organic meat and pork is the best source of consuming higher levels of protein; thus global pork procurement intelligence companies experience vast opportunities in the market.

2. Increase in Restaurant Businesses –

Individuals are embracing the trend of eating out, which poses positive prospects for restaurant businesses. Hence, restaurants, hotels, cafes, and franchise outlets are constantly selling pork cuisines.

Pork Market Segmentation:

1. Types of Packaging –

The foremost segmentation factor for the pork sector is different types of packing of goods including enclosed wrap, adjusted surroundings packaging, watertight packaging, shrink wrap using films, and more.

2. End User Industries –

A few major end-user industries of the pork market include food, retail, consumer goods, healthcare, restaurants, institutional food service, etc.

Regional Outlook of the Pork Market:

Various worldwide nations emerged as leaders in the global pork industry which conducts production, consumption, exporting, and importing activities for pork goods and hold substantial shares. In this context, major pork manufacturing countries include China at 39.9%, the EU at 24.1%, the US at 12.6%, Brazil at 4.1%, and Canada at 2%. Further significant pork-consuming nations include China at 44.8%, the EU at 19.9%, the US at 9.9%, Brazil at 2.9%, and Hong Kong at 2.7%. Moreover, key countries that are fulfilling international pork products demand include the EU at 38.1%, the US at 28.4%, Canada at 13.2%, Brazil at 10.8%, and Mexico at 3.1%. Additionally, provinces that are importing pork meat goods comprise China at 44.5%, Japan at 13%, Mexico at 8.8%, South Korea at 5.9%, US at 4%.

Moreover, the procurement intelligence report declared that Russia encountered a vast 12% increase in production and supply rates over the five-year period ending in 2022 due to cutting-edge infrastructures, favorable weather, and government support. In addition, the U.S. experienced a rise in pork prices of $96 per hundredweight (cwt) which represents balance dynamics for pork supply and demand numbers in this nation.

Cost Drivers in the Pork Market:

Major cost drivers of the pork meat market that possess notable shares in the industry include feed at 72 percent, operating costs at 18 percent, and other costs at 10 percent. Thus, any shifts in these drivers’ prices can influence the whole pork industry.

Engagement Models and Benchmark Price Indices in the Pork Market:

Key benchmark indices of the global pork procurement intelligence market include USDA market weekly prices, CBOT, and MLA which help industry players to manage production, supply, and profitability numbers of their business. Furthermore, the index-based engagement model helps decide prices for pork goods depending on market benchmarks. Moreover, the cost-based engagement method allows include prices of feed, workforce, and other operations in the overall cost structure. Additionally, the spot purchase method allows trading deals immediately for the short term.

Key Suppliers in the Pork Market:

Two leading companies in the pork meat market include JBS S.A. and Tyson Foods.