Porto Alegre, October 9, 2020 – The United States’ industry is showing a consistent recovery, overcoming the impacts of the supply and demand shock resulting from the COVID-19 pandemic. In September, 11.123 million pigs were slaughtered, close to the numbers registered in the period before the pandemic. The average price of live pigs in the United States, in the week ended on September 26, reached the highest level of 2020, at USD 96.90/100 kg, according to a weekly report from USDA. At the worst moment of the crisis, live pigs reached USD 47.16/100 Kg (at the end of last June).
A recent report released by USDA pointed out that, on September 1, 2020, the U.S. pig herd stood at 79.099 million head, up 0.66% from 78.583 million head on the same date last year. In relation to the 79.634 million head pointed in the position of June 1, 2020, there was a decrease of 0.67%. The country’s herd is close to its historic top, reflecting the advancement of housing in recent years, with breeders aiming to meet the Chinese market.
U.S. exports are evolving well and with potential to increase, considering Germany’s recent problem, with more than 30 cases of ASF in boars, highlighting that Germans are the second-largest pork exporters in the European Union. China has stopped buying pork from the country as a protective measure. Other major exporters such as Brazil, Spain, and Canada can benefit from this situation. A point to add is that the plants in Brazil that are accredited to export to the Chinese already work with a high load, thus, new accreditations would be necessary for the expansion of currently registered volumes. Another point is the issue of ractopamine, used in much of the country, but banned in China.
In China, customs data released last week showed that the Chinese imported 2.91 million tons of pork between January and August 2020, a significant volume, since in 2019 the country imported 2.11 million tons.
The Chinese government recently issued a statement saying it aims to increase the country’s self-sufficiency in animal protein, but without citing dates for that. China intends to produce 95% of pork internally, 85% of beef and sheep meat.
China still suffers severely from the effects of ASF, and the full recovery of its herd will hardly occur before 2023 due to the productive cycle. China will likely start reducing its imports in mid-2021, but in a discreet manner, as its production progresses, which must not compromise business with Brazil.
SAFRAS Latam