good indicators in 2018 in a non-profitable context

Buenos Aires, January 11th. The cold numbers of the official statistics mark that swine production grew up in 2018. Updated to November, these are the most relevant data:

1.- Slaughter increased 5.3% to 6,17 million heads. It is expected 6.8 million head slaughtered from January to December.

2.- Pork meat production increased 9% to 567,000 tons.

3.- Per capita consumption rose to 15.2 kilograms per year.

4.- Imports (product weight) rose 13% to 38,751 tons.

5.- Exports (product weight) rose 30% to 16,891 tons.

But despite this positive evolution there some concerns about the present and the future of the pork production in Argentina. Last year (2018) costs production rose quicker than pork price; pig ranchers sell its production to a weak domestic market, while inputs are mostly fixed in dollars, like corn or soybean meal. “This was a lethal combination”, economist Carlos Seggiaro opined for the website.

“This was a bad year to the pork production”, consultant Alfonso Aguilera agrees. He remarks the increasing meat exports led by Argenpork consortium, mostly to Russia, but with China and Singapur as next destinations, as a positive fact.

He expects that 2019 be a better year, with higher pork prices. But Seggiaro thinks that dollar should increase 30%, in line with the estimated inflation rate. As wages continue below the inflation, demand will continue weak and prices will not able to compensate the currency depreciation.

Meanwhile, another consultant in dialogue with, Lucas Gabosi remarks that the pace of growth production is declining. He says that to sustain a 7 to 8% annual growth rate, 50,000 new mothers should have put in production during 2017 and 2018, and that is not the case. Gabosi expects a declining slaughter growth rate in 2019.

He agrees that the most positive fact is the growth in exports, a trend that should accelerate during this year.


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