On October 12, the US Department of Agriculture released a report on the meat industry at a global level, with projections for the end of the year and 2024. As always, the main data to be analyzed are those on China, considering that the country affects the dynamics of many markets around the world. The Brazilian market must also pay attention to the figures on the European Union and the United States, competing export markets.
China
USDA was conservative about the first figures on China, practically in line with the recently released projections by the attaché in Beijing, with only subtle changes. The first point is the pessimistic outlook for Chinese consumption in 2024, which must decline 0.93% compared to this year, from 58.68 mln tons to 58.14 mln tons. It is worth noting that China’s economy is slowing down, with this year’s GDP growth projected at 5% and in 2024 at 4.2%, according to a recent release from the International Monetary Fund (IMF), patchy numbers compared to the results of previous years, especially in the past decade. On the other hand, the local government has adopted stimulus measures, aiming to increase credit and household confidence. The expectation is that this will bring some impetus, improving consumption and investment indicators in the local economy. Data on the Chinese economy must be closely monitored and can change its market dynamics.
According to USDA, this year’s Chinese pork production must reach 56.5 mln tons, down 0.97% from the estimate of 55.95 mln tons for 2024. The decline is not surprising considering that the Chinese herd is falling 3.88% in 2023. In 2022 the local herd must close at 435 mln head against 452.56 mln head registered last year. However, despite the decrease, production will be higher than in the period before the outbreak of African swine fever (ASF) in 2018. Pig slaughter in China in 2024 is projected at 705 mln head, down 1.21% from 713. 61 mln head expected for 2023.
With the projection of a decline in production and moderate consumption in China, pork imports in 2024 must not expand significantly, being expected at 2.3 mln tons, just 20 thousand tons above the current year. Next year will continue to be challenging for Chinese pig farming, mainly due to the economic scenario, which could affect its exchange rate and domestic consumption. In any case, the volume imported by China will be large, and Brazil will be able to keep up with the existing demand. The point of attention will continue to be the pork price in the international market, as is currently happening.
European Union
USDA data show a still complicated scenario for pig farming in the bloc. Pork production in Europe must continue falling in 2024 according to USDA, estimated at 21.15 mln tons, down 1.63% from 21.50 mln in 2023. Compared to the peak production on record, it is worth pointing out that this is the lowest production in the region since at least 1999. As for the herd, long-term numbers also show a strong decline. The final herd for 2024 was estimated at 132 mln head, practically stable compared to this year. For 1999, when the herd was 164.44 mln head, the decline is close to 20%. Over the last few years, several factors have impacted production, including the incidence of ASF in Eastern European countries, the high cost of production, hindered by the severe drought that affected local crops. Furthermore, the Ukraine x Russia war also impacted energy prices.
With the decline in production, live pig and pork prices remain at high levels in the European Union, which must hamper exports. This is precisely one of the reasons why Brazil is managing to expand the volumes shipped this year, a strong gain in attractiveness relative to prices, managing to enter mainly Asian countries. The high price of pork will also weigh on domestic consumption in Europe. According to USDA, consumption should close 2023 at 18.40 mln tons and 2024 at 18.05 mln tons, a decline of 1.90%.
The European Union must export 3.2 mln tons next year, the same number as in 2023, according to USDA, which seems optimistic given the current scenario experienced by the bloc.
United States
USDA estimated higher numbers for production, consumption and exports in 2024. US production in 2024 should be 2% higher than in 2023, going from 12.385 to 12.660 mln tons, with a strong increase of pigs per litter, and a decline in nutrition costs. With an increased supply, pork prices must remain stable, and with this domestic consumption should increase and there will be great attractiveness in the international market, being the major competitor for Brazilian pork in 2024. US consumption is estimated at 9.839 mln tons for the end of this year and at 10.048 mln tons in 2024, an increase of 2.12%.
USDA predicts that US exports must increase 2.77% in 2024 to 3.152 mln tons due to strong demand from Canada, the Philippines, and South Korea.
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