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15 May 2023

Econ Digest

Farmgate prices of live pigs in 2023 may drop, putting pressure on pig farmers

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        Farmgate prices of live pigs in 2023 may drop to THB88-92 per kilogram, declining by 7.5-11.5% compared to the high price of THB99.5 per kilogram recorded for 2022. The decrease is mainly caused by supply-side factors including rising imports due to insufficient domestic production for consumption, and increasing domestic production by some pig farmers following the easing of the African swine fever (ASF) outbreak. As a result, the pig production in Thailand is expected to increase by 3.5%YoY to 16.1 million pigs in 2023. Big challenges faced by pig farmers include persistently high production costs, especially animal feed, fuel prices, electricity costs and costs of farm management to prevent the ASF outbreak, as well as rising temperatures in the second half of the year.

        The retail market prices of red meat have decreased since the beginning of the year in line with the farmgate prices and may drop slightly for the rest of the year. It is expected that the average retail price of red meat (buttocks) may stay at THB160-170 per kilogram in 2023, or a decrease of 7.2-12.6%. However, the prices of pork-based foods are likely to remain high due to the persistently high production costs for other ingredients and expenses.

        Over the next two years, pig prices are likely to remain high in line with persistently low domestic supply as compared to normal circumstances with no ASF outbreak. Due to ASF, climate change and high manufacturing costs, domestic production may not be sufficient to meet the increasing demand amid the economic recovery. In the short-term, pork imports from standard markets may be necessary to alleviate supply shortages. However, this would put pressure on prices and exacerbate the situation for local pig breeders. As a result, it is crucial to focus on efficiency improvement across the entire production process. It is important to provide pig farmers with support to restore their businesses and attain a sustainable income that can cover expenses. Plus, strict control measures to prevent recurrence of the ASF outbreak are necessary to mitigate potential loss to pig production while avoiding risks to Thailand’s food security going forward.

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