6 reasons why Brazilian pork prices surpass those in the EU
Brazilian pork prices reached record levels in November, surpassing even those in the European Union. That is the consequence of at least 6 coinciding factors.
In November, the monthly average reached R$10.11/kg (€1.59/kg liveweight) in Brazil’s domestic market, marking an increase of 47.1% in 2024. The upward trend happened across all Brazilian pork-producing regions.
The price of Brazilian pork surpassed that of major international competitors, such as the US, Canada and the EU, which typically has the highest prices. Early January 2024, Brazilian prices were 22.4% lower than those in Europe (€210.3 vs. €163.22 per 100 kg carcass). By mid-November, however, they were 4.9% higher (€195.05 vs. €204.76 per 100 kg carcass).
Over the past year, the value of Brazilian pork on the international market has risen by 31%, whereas the Europe’s prices dropped by 8%. The US and Canada also recorded increases of 35% and 13%, respectively. The sharp rise in Brazil’s pork prices results from at least 6 factors affecting both supply and demand.
More spending money in Brazil
Growing domestic demand to pork accounted for 76.2% of consumption in 2023, has remained strong this year. Partly this is due to an increase in spending money in Brazil, as currently, the country is experiencing its lowest unemployment rate in 13 years, at 6.5%.
Soaring pork exports
At the same time, Brazil’s pork exports have also hit historical records in 2024. From January to October, shipments rose by 10.7% in volume, reaching 1.12 million tons, compared to 1.01 million tons during the same period last year. Markets like China, the Philippines, Japan and Mexico increased their purchases in October. The Philippines alone imported 206,000 tons during this year.
Restricted availability of market hogs
A 3rd decisive factor was a relatively low availability of hogs at ideal slaughter weight levels, which restricted market supply and pushed up prices in recent weeks. Producers reported difficulties to meet the growing demand, particularly in November, when buyers intensified purchases from external clients.
Higher pork production costs
A 4th reason is related to the increase of production costs, as the cost of corn and soybean meal has risen significantly. The price of a bag of corn has risen by 28.7% since July, while soy has seen a 29.1% increase since February.
Unfavourable exchange rate
In addition to grains, the 25% appreciation of the US dollar against the Brazilian real in 2024 has begun to impact the costs of other input, such as genetics, medication and additives.
Higher prices for beef and poultry
Last but not least, rising prices of other types of animal proteins have also contributed to the increasing demand to pork. Beef, for example, has seen a 53.4% increase since June, while poultry prices have risen by 12.3% in the same period.
Projections indicate that prices will remain high at least until the end of December, given the tight balance between supply and demand due to the holiday season in the domestic market.
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