Brazil Swine Sector Rebounds: Strong Production and Export Growth in 2023

In 2023, both production and exports in the swine sector in Brazil exhibited robust performance, supported by lower production costs and record-breaking pork shipments. After enduring a prolonged period of losses, the swine industry experienced a notable recovery, driven by increased production efficiency and favorable market conditions.

The surge in production during the 2022/23 season, attributed to expanded cultivation areas and enhanced productivity, contributed to a significant drop in key input prices such as soybean meal and corn from 2022 to 2023. This decline, reflected in the ESALQ/BM&FBovespa Index (Campinas, SP), reached 28.3%, settling at BRL 67.12 per 60-kilo bag in real terms (IPCA Nov/23). Similarly, soybean meal in the same region saw a 13.5% decrease, reaching BRL 2,475.25 per ton.

The reduction in input costs resulted in increased profitability and purchasing power for swine producers. Comparing averages from 2023 (up to Dec. 26) with 2022, swine farmers could buy 32.1% more corn and 8.2% more soybean meal for each kilo of live pig sold, marking the highest purchasing power since 2020, according to Cepea calculations.

Live pig prices experienced a notable increase in real terms across all regions surveyed by Cepea in 2023. In southwest Paraná, for instance, prices rose by 13.6% from 2022 to 2023 (up to Dec. 26), averaging BRL 6.61/kg.

However, the transfer of live pig price increases to pork meat faced challenges, as slaughterhouses encountered low liquidity in the domestic market for most of the year. From 2022 to 2023 (up to Dec. 26), special carcass prices declined by 0.6%, averaging BRL 10.08/kg in real terms (IPCA Nov/23).

On the export front, the swine sector demonstrated impressive performance, with 1.1 million tons of in natura and processed pork meat shipped from January to November 2023, representing a 10.5% increase compared to the same period in 2022, according to Secex. Notably, the sector surpassed 100 thousand tons of exports for seven consecutive months in 2023, a milestone not previously observed in the Secex series. With this momentum, there is potential to surpass the record set in 2021, reaching or exceeding 1.12 million tons in exports.