Live pig prices dropped in the Brazilian market in August, reducing the purchase power of swine farmers against the major inputs consumed in the activity: corn and soybean meal, according to a market report from Brazil's Centre for Advanced Studies on Applied Economics (CEPEA).

Lower demand for pork meat led meat processors to purchase fewer batches of slaughter pigs, putting pressure on quotations. In the SP-5 region (Bragança Paulista, Campinas, Piracicaba, São Paulo e Sorocaba), the average price for live pigs in August (until the 29th) closed at BRL 6.28/kg, 5.4% lower than that from July.

In the market of corn, values closed 3% lower than the average from July, at BRL 53.32 per 60-kg bag (until August 29th). Pressure came from the progress of the harvest of a record crop. However, it is important to highlight that corn devaluations were not enough to underpin the purchase power of farmers against this input, since live pig devaluations were steeper.

On the other hand, for soybean meal, high demand – mainly from abroad – raised both the export premiums in Brazil and domestic prices. In August (until the 29th), the average price for soybean meal (Campinas, SP) closed at BRL 2,253.47/ton, 0.5% higher than that from July.

In that scenario, and considering the animals sold in the SP-5 region and the inputs traded in the spot market of Campinas, on the average of August (until the 29th), farmers were able to purchase 7.07 kg of corn by selling a kg of live pig, 2.5% less than that from July. Of soybean meal, farmers were able to purchase 2.79 kg, 5.9% less than that from July.

(BRL 1 = USD$ 0.20)