On Tuesday, the price of lean hogs plummeted following forecasts of increased swine production and exports in Brazil for 2024.
The Chicago Mercantile Exchange (CME) lean hog futures for February delivery shed -2.87% to ¢69.30 per pound on December 27. Furthermore, industry watchers expect a further decline of 0.39% to ¢69.03 a pound in the coming market session.
According to the US Department of Agriculture (USDA) Hogs and Pigs (H&P) Report, the national swine breeding herd lifted 0.50% year-over-year in December. This marked the first surge in breeding herd in 2.50 years.
It defied the market consensus of a -0.30% drop and the pre-report estimates of a -1.00% slide. Iowa State University economist Lee Schulz called the 0.80% to 1.50% point difference the biggest surprise in the livestock sector this year.
Schulz added that hog farrowing intentions from December 2002 through February 2023 stood at 2.95 million litters in 2023. The data indicated a 1.00% increase from the actual sows farrowing in the same period last year.
Livestock experts expected a decline due to low demand expectations caused by the anticipated economic slowdown. Additionally, they predicted t that the increasing cost of sow feed would force breeders to be cautious.
America’s total hogs and pigs inventory on December 01 was 67.00 million, -2.00% lower than the previous year. Traders foresee a reversal in the first quarter of 2024, driven by the maturation of this year’s breeding herd.
Brazil Lean Hogs Yield Growth to Continue in 2024
Brazilian pig farms enjoyed a remarkable performance in 2023, with substantial production and offshore sales growth.
Brazil produced 5.10 million tons of pork this year, 2.30% higher than the 4.98 million tons in 2022. Similarly, shipments of lean hogs added an impressive 8.90%, reaching 1.22 million tons.
Moreover, the Brazilian Animal Protein Association (ABPA) forecasts a 1.00% output growth rate to 5.15 million tons in 2024. Likewise, the organization anticipates the country to ship 1.30 million tons of hogs, marking a 6.60% expansion.
ABPA marketing director Luis Rua attributes the rise in exports to a slowdown in shipments from the European Union and Canada. In addition, analysts see the domestic hogs market retaining stability with a per capita consumption of 18.00 kilograms per inhabitant.
