Will Brazil's pig sector break records again?

Last year the pig sector in Brazil expanded big steps. Both pork production and exports achieved significant growth. Pork exports increased by no less than 36% last year, reaching the 1 million ton mark for the first time. Analysts attribute the significant increase to greater Chinese demand. Last year, exports to China accounted for more than half of total exports.

The Brazilian pig sector has not stopped growing and is continuing to take steps this year. The United States Department of Agriculture (USDA) expects both pork production and exports to grow even further this year, reaching another new record. Pork production is expected to grow by 3% to 4,25 million tons and pork exports are forecast to grow by 4%.

High production costs
Pork production will grow despite higher production costs. According to Brazil's pig production cost index, costs rose 42,05% last year, mainly due to a spike in feed costs. Production costs for 2021 are expected to remain at approximately the same level.

The forecast for growth in pork production this year is based on expectations that Asian pork demand will remain strong in 2021, coupled with expected growth in domestic consumption. Because beef prices are currently very high, more consumers are expected to switch to pork. It is estimated that domestic pork consumption will amount to about 15% of total meat consumption.