Post revised 2014 hog production to increase by 1.5 percent as a function of higher pork exports and a small increase in domestic demand. Hog producers will likely benefit from record soybean and corn crops estimated for the 2013-14 crop year, but will continue with their strategy of adjusting supply and demand to ensure profit margins.
Pork production is forecast to grow by 1.5 percent in 2014. The 2014 production estimate of 3.3 million metric tons reflects the current expectations of producers to continue with the strategy (similar to poultry producers) to adjust supply and demand for pork to ensure profitability. Producers also expect to benefit from reduced production costs in 2014 based on estimated record soybean and corn crops combined with higher exports. However, similar to the poultry industry, there are some constraints that could hamper this year’s increase in pork production, of which the most important are: the uncertainty of the economic outlook and rising inflation which could slow down the growth path of domestic consumption; the continued level of indebtedness of Brazilian consumers; greater competition with poultry and to a lesser degree with beef; and the ongoing drought in the Center-South that could affect the current soybean and corn crops, and lead to shortages in some producing regions of the country, as well as higher energy costs.
Post forecasts 2014 pork consumption to increase by nearly 2 percent because of higher demand from the food service industry mostly due to increased tourism related to the World Soccer Cup matches in June-July. In addition, pork prices in the domestic market are expected to remain competitive with beef prices.+
After a significant drop of nearly 12 percent in 2013 pork exports, Post forecasts 2014 pork shipments to increase by two percent. The significant drop in pork exports is mostly attributed to the decline in pork shipments to Ukraine (-51 percent) due to the ban early in 2013.
Thursday February 20, 2014/ GAIN-FAS/ USDA/ United States.