African swine fever has yet to inflate pork prices. As a result, an industry analyst has lowered the earnings estimate for Hormel Foods in the third quarter of 2019.
Stephens Inc predicts any “protein inflation” among U.S. producers has shifted to fiscal 2020 from 2019.
Meat industry publication Meatingplace reports that has left Hormel to contend with price increases it launched to offset inflation that never occurred. Hormel risks losing volume share to competitors if it doesn’t walk back the current price increases for pork. However, such a move would conflict with the ability to raise prices once the inflation arrives next year.
African swine fever seems destined to cut China’s hog production in half, according to researchers at Rabobank. That would equate to roughly 300-350 million pigs, or a quarter of the world’s pork supply. China still has an ample amount of pork supplies, but supplies are starting to run short, leaving China to consider imports of pork, which would, in turn, increase global prices.