Porto Alegre, October 23, 2020 – The price of live pigs continues in an upward trend in the country in a picture of lean supply in view of the demand from slaughterhouses. Pigs are light in most states, according to reports, being one of the components that determines the availability of pork in the domestic market. Another important point at this moment is the cost of production, which has been in a strong upward movement, following the prices of corn and soymeal. In view of high costs, farmers choose to retain animals for the shortest possible time on farms, partly explaining the condition of pig weight. With rising feedstuff inputs, farmers have tried to raise prices every week for livestock to maintain the margins of activity.
Besides the aforementioned factors, Brazil still has a strong export pace, driven by purchases from China, drying up the national supply, mainly in the southern states. For the demand for pork cuts in the domestic market, it tends to lose strength during the second half of October, with less capitalized households, but the strong price of beef may favor substitute products and bring some breath.
Cost is certainly the main concern of farmers at the moment. The picture of soymeal is complicated due to the scarcity of supply, as a result of the record exports of soybeans in 2020. Thus, prices are unlikely to drop until next season, in March/April 2021. As for corn, there is product in the Brazilian market but few sales by producers, evaluating factors such as exchange rate, firm prices at ports, and climatic risk for the summer crop. The situation for corn tends to worsen in the first half of 2021, with a smaller summer crop compared to this year and with logistics concentrated on soybeans, which deserves attention.