Brazil Holds the Lowest Cost of Pork Production Among 17 Countries

Brazil maintains its global leadership in the cost of pork production per kilogram among 17 countries. In 2022, the production cost per kilogram of live pork was $1.28 in Santa Catarina and $1.13 in Mato Grosso. Despite a 10% and 12% increase in the two states, respectively, compared to 2021, these values are still lower than in the United States ($1.42 per kilogram), Denmark ($1.49), Spain ($1.66), Netherlands ($1.74), and Germany ($1.83). The average cost among the 17 countries in the InterPIG network is $1.72 per kilogram.

Global pork production costs saw a significant increase in 2022, according to data from the InterPIG group, representing institutions from 17 pork-producing countries, including Brazil. The main factors contributing to this rise were the prices of corn and soybean meal, influenced by climatic events and geopolitical factors such as the Ukraine war, impacting fertilizer costs and reducing global grain supply. Global inflation in prices (electricity, vaccines, medications, and construction) and labor remuneration also played a role.

Brazil also boasts the lowest prices received per live kilogram of pork, with $1.06 in Mato Grosso and $1.10 in Santa Catarina, compared to the U.S. average of $1.58 per kilogram. Despite increases, the Brazilian pork industry remains competitive due to lower animal feed and labor costs.

The lower costs in Brazil are attributed to efficient production and pricing. The country has competitive zootechnical coefficients, thanks to technology adoption and livestock health investments in biosecurity and agricultural defense. Additionally, lower labor remuneration and facility costs contribute to Brazil’s cost advantage. For instance, in 2022, the hourly wage in Brazil was around $3, significantly lower than in Spain, where it stood at $16.29.

The main determinant of lower costs in Brazil compared to other countries is the cost of animal feed. In Mato Grosso, the average cost was $0.87 per kilogram due to low feed conversion and lower feed prices. In Santa Catarina, the cost was around $1.02, influenced by higher feed prices despite good feed conversion. Notably, Denmark and the United States had costs of $0.96 and $1.03 per kilogram of live animal, respectively.

Looking ahead to 2023, there is a trend of falling feed prices and stable overall prices, providing an opportunity for Brazil to expand its pork exports. The researcher Marcelo Miele from Embrapa Suínos e Aves highlights the potential for Brazil to move up to the third position in the international pork market, surpassing Canada in exports.

In summary, Brazil’s pork industry remains competitive globally, thanks to efficient production practices, lower labor costs, and favorable pricing, positioning it for potential growth in international pork exports in the coming year.