Analysts estimate that the ratio between live hog prices and soybean meal costs has deteriorated for the fourth consecutive month. In July, producers’ purchasing power for this feed ingredient fell to its lowest level since January 2024.
The situation is even more challenging for corn: the amount of grain producers can purchase with revenue from hog sales dropped to its lowest level since January 2023.
In July, prices for live hogs, corn and soybean meal increased slightly in the state of São Paulo. However, feed ingredients became more expensive at a faster rate than hogs, resulting in a further decline in production profitability.
A substantial supply of market-ready hogs is preventing a more significant increase in producer prices. At the same time, pork demand remained firm during the first half of July, providing some support to the market.
The future direction of Brazilian producers’ margins will depend on the relationship between live hog and feed prices, as feed represents one of the largest cost items in pig production.
PigUA.info, based on materials from thepigsite.com