The Recovery is Holding

Meanwhile feed costs have been falling slightly, adding benefit to the positive margin on hogs. Soy meal is around US$546 per metric ton and corn about US$184 per metric ton.

The number of hogs slaughtered is firm. The government statistics department, IBGE, reported that in the third quarter, 9.351 million hogs were slaughtered, an all-time record, though only 0.6 per cent higher than the same quarter in 2012.

Pork exports were disappointing again in November. At 38,673 metric tons, they were 24.3 per cent down on November of last year in volume and 25.3 per cent in value. This follows a fall of about 15 per cent in both figures in October. Year to date, exports are down 11.3 per cent in volume and 9.6 per cent in value compared to 2012.

However, the president of ABIPECS (association of pork exporting plants) believes that the current situation of the industry augurs well for 2014, and estimates an increase of 15.7 per cent on the estimated figure for 2013 of 510,000 metric tons, leading to total exports of 590,000 metric tons in 2014. He expects Japan to import more pork from the state of Santa Catarina, the only state that country has authorized to export so far as it is free of F&M disease without vaccination.

But ABIPECS expects the national sow herd to remain stable, with increased production coming from higher productivity. With increased demand and limited increase in production, prices should remain stable during the coming year.

This is my last Global Market Report from Brazil. I became the Genesus representative in Brazil some 5 years ago and we sought a partner to bring Genesus genetics to the country. We came very close, but the deal fell through, perhaps luckily as Brazil is complicated and Genesus is making great strides in more promising new markets in Eastern Europe and Asia.

I was forced out of the industry three years ago by negative cash flow, after 35 years of activity. However, since then I have managed to control the resulting situation and am able to concentrate on other things.

Brazil is a difficult country in which to make an honest living, due to high taxes, suffocating bureaucracy and labor laws that have destroyed many small businessmen. It is a wonderful country in which to make a dishonest living, as the nightly news shows us, with those who run the country unable to distinguish between public and private funds. The governor of Rio de Janeiro state even uses the state helicopter to take his pet dog down to the beach house!

However, even this may have its days numbered (albeit in the tens of thousands), as in the month of November the Supreme Court sent powerful politicians to jail (yes, real jail) for the first time since Brazil became a republic in 1889, including ex-president Lula’s chief of staff, for buying votes from congressmen. Their party shamelessly calls them "political prisoners" even though the majority of the members of the Supreme Court were appointed by that same party.

Since I feel unqualified to join the swollen ranks of public purse snatchers, I decided some years to take a law degree, which is now nearing its conclusion and which will be an additional activity to the translations that I currently perform. Some lawyers actually make an honest living – it is said here that it is only 99 per cent of them that spoil the reputation of the others!

As this has distanced me from the pig industry and takes an increasing amount of my time, I feel I am no longer the appropriate person to provide Brazilian Market Reports. However, I take this opportunity to thank Jim, Mike, Fernando and others in Genesus for the opportunity to work with them over these recent years, and wish Genesus and all its staff and customers a very prosperous New Year and beyond!