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USDA GAIN: Livestock and Products

27 February 2014

USDA GAIN: Brazil Livestock and Products Semi-annual 2014USDA GAIN: Brazil Livestock and Products Semi-annual 2014

Pork production and exports are also forecast to rebound in 2014 by nearly two percent after a decline in production and exports last year. Driving forces behind higher pork production are lower feed costs due to record soybean and corn crops and higher exports due to the weaker Brazilian real and the reopening of new export markets. In general, high indebtedness of Brazilian consumers is the main constraint for the smaller growth path for domestic demand for animal protein, although packers view the World Cup Soccer matches in June-July as a way to increase sales to the domestic food industry.

USDA GAIN: Livestock and Products


Animal Numbers, Swine


Post revised 2014 hog production to increase by 1.5 percent as a function of higher pork exports and a small increase in domestic demand. Hog producers will likely benefit from record soybean and corn crops estimated for the 2013-14 crop year, but will continue with their strategy of adjusting supply and demand to ensure profit margins.


Meat, Swine


Pork production is forecast to grow by 1.5 percent in 2014, which contrasts with Post’s revised downward 2013 production level. The 2014 production estimate of 3.3 million metric tons reflects the current expectations of producers to continue with the strategy (similar to poultry producers) to adjust supply and demand for pork to ensure profitability. Producers also expect to benefit from reduced production costs in 2014 based on estimated record soybean and corn crops combined with higher exports. However, similar to the poultry industry, there are some constraints that could hamper this year’s increase in pork production, of which the most important are: the uncertainty of the economic outlook and rising inflation which could slow down the growth path of domestic consumption; the continued level of indebtedness of Brazilian consumers; greater competition with poultry and to a lesser degree with beef; and the ongoing drought in the Center-South that could affect the current soybean and corn crops, and lead to shortages in some producing regions of the country, as well as higher energy costs.

Post revised 2013 pork production down by 1.5 percent to reflect the multiple problems faced by hog producers. They were forced to adjust to supply and demand because of the high costs of production during 2012 and throughout the first quarter of 2013. Another key factor was the drop in 2013 pork exports due to Ukraine’s ban on Brazilian pork shipments.


Post forecasts 2014 pork consumption to increase by nearly 2 percent because of higher demand from the food service industry mostly due to increased tourism related to the World Soccer Cup matches in June-July. In addition, pork prices in the domestic market are expected to remain competitive with beef prices.


After a significant drop of nearly 12 percent in 2013 pork exports, Post forecasts 2014 pork shipments to increase by two percent. Pork exporters are optimistic that the depreciation of the Brazilian currency will make their product more competitive in the world market. In addition, they also expect to increase sales to Ukraine after the reopening of that market. Japan is also a promising market, but there are some constraints regarding increased sales there due to logistics problems, mostly involving maritime distance and costs.

Post revised 2013 pork exports to bring them in line with final export data. The significant drop in pork exports is mostly attributed to the decline in pork shipments to Ukraine (-51 percent) due to the ban early in 2013.

February 2013

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