The live pork and the pork half registered price increases below inflation in October, however, the price on gondola rose 35% in one month, the biggest jump in 20 years.
He hood reached the highest price in dollars of all of 2023. “The value is 10.6% more than in September and 4.4% less than the same month last year,” explained zootechnical engineer Juan Luis Uccelli, consultant and specialist in the pig market.
On counter
The price of pork, which had maintained an increase lower than inflation in August and September, jumped in October which, added to the delay in the price of the dollar, made the dollarized value strongly more expensive to the public, as the engineer explained.
The increase in the price of beef to the public dragged down that of pork, but the difference is much greater, in favor of the average pork, than a year ago. The half beef and the gutted chicken evolved almost in parallel while the half pork followed its own path.
“Despite the rise in live pigs, the sharp jump in value to the public ruined the relationship reaching values above the average and that have not been observed for 6 or 7 years,” said Uccelli.
The Pork Index in pesos rose by 34.9% during the month of October y accumulates 175.7% in the last twelve monthswell above inflation.
Rude
According to the consultant, “the cut of ham had a very rude increase, followed by the index and the breast, then the corn, beef, soy, capon and the dollar which showed no changes.”
So far this year, the price increase has been very important for both soybeans and ham cuts, exceeding 200%. They are followed by beef, pork cuts, corn, the dollar and the value of live capon.
Comparative increase in pork and variables, October 2023. Source: JLU.
“We had two months of greater increase in live pork than public prices, but in October the latter rose a lot and made a big difference. In three months the difference increased by 16.5% which is too much for our country’s reality,” said Uccelli.
Who loses and who wins
The new update of the price of corn and soybeans to a more competitive dollar (Export Increase Program) and the limitations on the import of inputs necessary for production increased costs, lowering the gross margin in dollars. “We know that this situation is very complicated for small-scale producers,” lamented Uccelli.
“Producers’ cereal prices are increased by a new dollar and their pork, despite the increase, does not have the same result. This causes, in the best of scenarios, a drop in the gross margin and for many small producers a very serious complication of red in the accounts,” Uccelli warned. Added to this is the lower sale of corn and soybeans by farmers due to the prevailing uncertainty.
“Considering that the government that is elected will inevitably carry out a devaluation, part of it is being paid by producers when they buy corn and soybeans with a dollar much higher than the official one. Part of the low blow of the devaluation, pork producers are paying today“said the consultant.
Both the live pig and the average beef had increases lower than inflation, but “the public price took a leap that one can assert that It did not happen in the last 20 years: 35% in one month“said Uccelli. “It is outrageous, even though in August and September the increase rose below the price of live pigs, but taking the three months, the difference in favor of the public price increased by more than 16.5%,” said Uccelli. he remarked.
Evolution of the increase in meat and live pork. Source: JLU.
This is related to the increase in the price of over-the-counter beef, which, although it did not grow by that percentage, had been rising in the last three months. “Pork was accommodated or rather, they accommodated it, maintaining a difference of 20% to 30% cheaper than beef, being close to chicken,” said Uccelli. The thing is that the price to the public is driven by the relationship with the beef and not by the value of the live pig. “This situation threw the live pig ratio out of control, with the Pork Index exceeding the historical average of 3.08 and reaching 3.18. It should normalize in a short time, remembering that for the last two years we were at a ratio of 2.6 to 2.8,” he explained.
“Being producing without knowing if tomorrow the pigs will be able to have balanced food, if we will be able to apply the immunocastrator, after having an uncastrated puppy and many other things, logically it is impossible,” said Uccelli. However, he added, “Argentine pork producers continue to produce and, incredibly, they continue to invest and for some it is still profitable.”
Likewise, he pointed out that the sector must “negotiate again with the new authorities that take office in December, showing the virtues of generating rurality, giving value to cereals, replacing the beef that will be missing and even foreign exchange through the export of pork, byproducts and processed products”.
2023-11-01 13:26:00
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