Mexican pig prices jump, grains also
The Mexican pork market has been gradually recovering from the low prices at the beginning of the year. In the last month and a half, it has managed to push up the prices by around $0.33 per kilo liveweight to $1.76/ kilo, according to the latest Genesus market report. However, the outlook on the sector is far more complicated as prices of grains, most of which are imported, have risen 50% in cost, significantly impacting pig production costs in the North American country. "If the exchange rate between the Mexican peso vs. US dollar remains stable as up to now, around 20 Mexican pesos per dollar, it is still profitable to produce with the high costs of food raw materials.
The situation would become more dramatic if the Mexican peso suffered a devaluation, which is not strange, especially in times of high volatility such as the current ones.
The recent spike in pork prices is believed to be due more to seasonality than any other effect. It is normal that at the end of the Holy Week and Easter festivities the consumption of red meat returns to its normal course. However, what happened in the last year has been very atypical due to the Covid-19 pandemic," commented Fernando Ortiz, Ibero-America Business Development Manager at Genesus Genetics Inc.
It is also believed that other external factors have contributed to a recovery in live pig prices, and these are mainly an increase in exports to China, showing higher demand. As well as the increase in swine diseases in the United States such as PRRS and PED. Herd expansion foreseen by the analysts back in 2019 is still pending, awaiting further stabilization of the market. Rumors of some producers and some packers wanting to sell their assets, both farms and meat processing facilities have been heard but no major deal was completed so far.
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