W19: Pork Update

In W19 in the pork landscape, the FAO placed the average meat index in April at 114.5 points, up 1.3% MoM, but down 6.1% YoY. Specifically, the FAO indicates that global pork prices in April rose primarily due to increased import purchases from Asian countries and limited supplies from several leading exporting countries due to rising production costs and animal health concerns. According to the USDA, US pork exports in March 2023 reached 260.2K MT, up 17% YoY, the highest level since May 2021, valued at USD 724M, an increase of 18% YoY. Through the first quarter, US total pork exports increased by 14% to 716.69K MT, valued at USD 1.96B, up 15%. US March pork shipments were mainly destined for Mexico, reaching 95.03K MT, up 15% YoY and the second largest on record, valued at USD 195.7M, up 31% YoY. Other destinations with increases in US pork exports were South Korea, Japan, China/Hong Kong, the Philippines, Australia, and Taiwan. One of the factors making 2023 a promising year for US pork export growth is the pork situation in the EU, where the industry has been facing mounting production challenges, and significant financial losses have contributed to tightening supplies and rising hog and pork prices. LMIC indicates that in W18, US early weaned feeder pig prices were at USD 22.05 per head, a drop of more than 65% since the end of January 2023, down 55.2% YoY and 42.6% below the five-year average. Meanwhile, since mid-March, US feeder pig (40 lbs) prices plunged from USD 88.55 per head to USD 53.49 per head in W18, a decline of 42.4%. According to LMIC, the depressed prices are due to negative profitability for a wean-to-finish operation for the last seven months, with wean-to-finish losses ranging from USD 18 to 39 per head.

DESTATIS data shows that, in Q1 2023, German pork production reached 1.06MMT, down 8.2% compared to Q1 2022. In the first three-month period, Germany slaughtered 11.12M pigs, down 8% compared to the same period in 2022, with the number of slaughtered imported pigs reaching 394.14K, an increase of 29.4% compared to the same period in 2022, which could still not compensate for the deficit of 1.06M domestic breeding pigs. ABPA reports that Brazilian pork exports (fresh and processed) in April 2023 totaled 104.5K MT, valued at USD 251.3M, up 16.6% YoY in volume and an increase of 29.9% YoY in value. In the January-April period, Brazilian pork exports reached 379.4K MT worth USD 897.7M, an increase of 15.9% in volume and 29.7% in value compared to the same period in 2022. In the first four months of 2023, Brazilian pork shipments were mainly destined for China (143.2K MT), Hong Kong (42 .2K MT), the Philippines (27.8K MT), Chile (27.3K MT), and Singapore(23.8K MT). In Poland, domestic slaughterhouses and intermediaries pay an average of USD 2.11/kg for first-class live pigs, a drop of almost USD 0.073 compared to the last listing, while class E pigs are priced at USD 2.66/kg on average, a decline of USD 0.097 compared to the last week of April. This price reduction is linked to the poor pork trade and the availability of cheaper pork products from the West, which are deemed profitable due to price differences between Poland and other EU countries.

In Q1 2023, Chilean pork exports reached 77.49K MT, valued at USD 201.7M FOB, an increase of 43% in volume compared to Q1 2022, with March shipments amounting to 26.8K MT, up 3.5% MoM and 31.7% YoY. Chilean pork imports in the first quarter totaled 27.44K MT, valued at USD 76.5M CIF, up 29.6% compared to the same period in 2022. In the first two months of 2023, Chilean pork production totaled 91.03K MT, an advance of 0.6% compared to the same period in 2022. In the first quarter of 2023, the number of slaughtered pigs in Argentina reached 1.922M heads, an increase of 9.4% compared to Q1 2022, with castrated pigs accounting for 79.9%, immunocastrated males corresponding to 15.9%, and 4.1% corresponded to all other types (whole, cull sows, piglets and boars). In January-April 2023, Paraguayan pork exports totaled 1,336MT, valued at USD 3.5M, up 1693% in volume and 1805% in value compared to the same period in 2022, with shipments mainly destined for Taiwan, Uruguay, Georgia, and Ivory Coast. The recovery is linked to a much more favorable market situation in 2023, since in the first four months of 2022, the world oversupply had affected the pork sector, while at that time China closed its market to be self-sufficient and the suppliers that sold to the Asian giant were exporting their products at a lower price to markets that Paraguay usually supply. Lastly, the WOAH confirmed on April 28th the outbreak of ASF that was detected on April 1st in Indonesia that killed 35,297 pigs in a herd of 285,034 on a farm located on Bulan Island.