Brazilian swine market will have major challenges in 2022

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Porto Alegre, January 18, 2022 – Just like last year, 2022 will be challenging for Brazilian pig farming. The industry’s margins tend to remain tight, especially in the first semester, considering that production costs will remain at a high level while the price of live pigs is not likely to have consistent gains. It is worth noting that corn, the main component of feedstuff, must present a situation of stress in the first months of 2022, considering that, besides tight carryover stocks, logistics from January onwards must be focused on soybeans, which will eventually lead to an increase in freight rates. Soymeal may present a lighter scenario in the period, depending on international prices, premiums and exchange rates. Corn prices may cool down in the second semester should the corn second crop evolves well with a favorable climate, which will deserve attention.

As for the price of live pigs, considering the monthly average in the Center-South, it walked sideways throughout 2021, failing to take off even with the high flow of exports. Faced with economic uncertainties, the average Brazilian consumer ended up opting for chicken, boosting the price of this protein to record levels for most of the year. What to expect for pork and live pig prices in 2022? After the end-of-year festivities, there may be an advance in replenishment between wholesale and retail, with readjustment in stocks, however, demand at the final tip tends to evolve timidly, households have higher expenses, besides debts in the first months of the year. Historically, the prices of the Brazilian swine chain face difficulties in this period, so the scenario for the swine farmers’ margins will remain tight.

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