Brazilian pig market to face major challenges in 2022

Like this year, 2022 will be a challenging year for the Brazilian pig industry. Margins are expected to remain low, especially in the first half of the year, given that production costs remain at a high level, while the price of live pigs is likely to find it difficult to reach a consistently high level.

It is worth mentioning that corn, the main component of the feed, should show a stress scenario in the first months of 2022, given that, in addition to limited carry-over stocks, logistics should focus on soybeans from January, which will eventually lead to more expensive freight rates. Corn prices could fall in the second half of 2022 if the second crop is good.

As for the prices of live pigs, taking into account the monthly average in the Central-South region in 2021, they changed in a horizontal direction, not achieving growth even with a high export flow. In light of economic uncertainty, the average Brazilian consumer ended up choosing chicken, causing the price of this protein to hit record highs for most of the year.

What are the expectations for live pig and beef prices in 2022? After the year-end celebrations, there may be progress in restocking between wholesale and retail, with inventory adjustments, however, demand tends to pick up steadily at the end of the year, with households facing higher expenses apart from debt in the first months of the year. Historically, prices in the Brazilian pig chain have been falling during this period, so profitability prospects for pig producers will remain limited.