W34: Pork Update

In W34 in the pork landscape, pig farmers in the southern region of Brazil experienced an increase in the average selling price in Jul-23. While Santa Catarina and Rio Grande do Sul experienced a marginal setback, Paraná achieved a notable rise. Consequently, the average price of live hogs traded at USD 1.14 per kilogram (kg) in Jul-23, a 3.6% month-on-month (MoM) increase but a 4.6% year-on-year (YoY) decline. This pricing scenario still leaves pig farmers with earnings significantly below the necessary threshold for profitable fattening, resulting in substantial losses for producers. Pig farmers received an average selling price of USD 1.19/kg of live pig produced during the first seven months of 2023. This represents a 3.6% increase over the same period in 2022 and a 7.2% drop compared to the same period in 2021. Moreover, the average price from Aug-22 to Jul-23 stood at USD 1.21/kg, a slight 0.4% increase over the previous 12-month period.

Brazil’s Pork Production Cost Index (ICPSuíno) reached 335.03 points in Jul-23, an increase of 1.66% MoM. The total production cost of live hog in a complete cycle system in Santa Catarina, serving as a reference for the calculation, stood at USD 1.20/kg in Jul-23, an increase of USD 0.021/kg MoM. This increase marked the conclusion of a four-month consecutive decline period since Mar-23. The positive shift in ICPSuíno was primarily influenced by a 1.27% increase in the nutrition component, which holds a significant 73.24% weight in the overall cost composition. Notwithstanding the Jul-23 increase, the ICPSuíno still registered a 27.47% decrease for 2023. Notably, a negative shift of 22.40% has occurred over the last 12 months.

In its Aug-23 report, the United States Department of Agriculture (USDA) expects United States (US) pork production to decline by 1% in Q3-23 compared to Q3-22. The USDA also anticipates an 8% drop in the producer price of fattening pigs in Q3-23 compared to the same period in 2022.

The Agricultural Markets Consulting Group (GCMA) reports that Mexico’s meat exports amounted to 310.87 thousand metric tons (mt), valued at USD 1.74 billion from Jan-23 to Jul-23. This indicates a 12.3% decrease in volume and a 13.1% drop in value compared to the same period in 2022. Mexico’s pork exports reached 123.57 thousand mt, valued at USD 484.3 million in the first seven months of 2023. This represents a 14% YoY drop in volume and a 15.7% decline in value. The price per ton also decreased by 2% YoY to USD 3,920/mt. The reduction can be attributed to a decline in Mexican pork shipments destined for China.

Lastly, AKI PÁIR indicates that the producer price for domestically produced slaughter pigs in Hungary, excluding value-added tax (VAT) and transport costs, reached USD 2.67/kg of carcass hot weight in Jul-23. This signifies a 27% surge compared to the average price in the same period in 2022. The processing sales price of cut pork items such as loin, ribs, and thighs surged by 31% YoY in Jul-23. Moreover, according to the Hungarian Central Statistical Office (KSH), the consumer price for short loin increased by 21.5% YoY, while pork leg prices rose by 6% YoY in Jul-23.