February 15, 2021
 

Prices for Brazil's live pigs drop 20% at start of 2021

At the beginning of 2021, prices paid for live pigs in Brazil fell 20% as demand dropped while costs continue to rise.

In January, the cost of the live pig stayed at R$6.77 (US$1.26) per kilo on average, while the selling price is at R$6.00 (US$1.12). The market is expected to be more favorable from the second quarter on when China is expected to resume purchases.

The drop in exports and the suspension of emergency aid paid by the Brazilian government to alleviate the crisis generated by the COVID-19 pandemic are having a negative impact on the pig market.

According to information from the Federal Foreign Trade Secretariat (Camex), exports of fresh, frozen or chilled pork in the 22 working days of January totaled 55,790 tonnes, compared to 72,200 tonnes registered in the 22 working days of December. The regional data have not yet been disclosed, but, according to Jalles, the trend is also toward smaller shipments.

The drop in prices paid per kilo of live pigs leaves the pig industry in Minas Gerais on alert, and the management of the activity becomes increasingly essential to overcome the crisis. With the kilo quoted at R$6.00 on average, the producer has accumulated a loss of R$0.77 (US$0.14) per kilo of live animal, since, according to data from the Brazilian Association of Pig Breeders (ABCS), the average cost of production is R$6.77.

Costs are expected to retract in the coming months, as soon as the grain harvest starts, leading to an increase in the supply of corn and soybeans in the market.

- ABRA (Brazil)