Live pig prices reach record level in Brazilian market

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Porto Alegre, August 13, 2020 – The price of carcass and live pigs remains firm in the country, at a historical level, reflecting a tight availability, mainly due to the strong pace of exports. In several states, such as São Paulo, Paraná, Minas Gerais, and Santa Catarina, animals have been light, which also helps adjust the meat supply. Moreover, the advancement of the quarantine relaxation helps the production flow of meat-packers. However, the full recovery of demanding activities is still far from happening, considering, for example, that restaurants and malls keep operating with restrictions and reduced hours. Another important point that explains part of the upward movement of pig is the escalation of production costs, following the price of corn and soymeal, which has led producers to seek corrections, in an attempt to maintain the margins of the activity. Subsequently, slaughterhouses try to pass these adjustments to pork, that is, there is inflation due to costs.

Slaughterhouses already find it difficult to pass the highs on to the final consumption point, with less capitalized households, typical of the end of the month, and aggravated by the economic crisis environment. It is worth noting that domestic demand will suffer for a relatively long period, considering the deepening of the economic crisis, due to COVID-19, a factor that accelerated the deterioration of the population’s income, besides increasing unemployment in the country. Thus, the transfer to final consumers will be an increasingly difficult task and may lead meat-packers to avoid new significant and sudden increases in live pig prices. But it is worth noting that the supply of animals available for slaughter has been tight across the country. According to a survey by SAFRAS & Mercado, the average kilogram of live pigs traded in Brazil’s Center-South was BRL 6.33 on August 20, up 11% from the beginning of the month. In relation to the price of the beginning of July, of BRL 4.40, the starting point of the upward movement, live pigs rose by 43.95%.