LOCAL hog production this year could expand by 9 percent to 2.4 million metric tons (MMT), from 2.231 MMT recorded output last year on the back of higher pork prices, according to the Pork Producers Federation of the Philippines (ProPork).
“More farmers are coming back into production because of better prices,” ProPork President Edwin G. Chen told the BusinessMirror in a recent interview. “Usually, if you have better prices; it will really encourage people to invest.”
Chen added that pork producers continue to invest as they deem the current economic climate favorable as the government seeks to curb smuggling, particularly in agricultural goods.
“Once the government turns a blind eye on the rampant smuggling and allows smuggling again, then people will start to hurt and not invest anymore,” he said. “It really depends on the policy. So far, we think that smuggling has been curbed.”
Still, Chen said local pork prices inch higher due to the continued weakening of the peso against the greenback.
“Inherently, the price of pork abroad is higher because of the dollar-peso exchange rate. So, the landed cost of pork is quite high,” Chen said. “Who will not invest, if you have a good price?”
Chen said the seasonal farmgate peak price of hogs is now the “new normal.” “Before, the P121 per-kilogram price was our peak level for the longest time. But now, it is our low price,” he said. “And people start to invest again, both backyard and commercial farmers, because of that price change.”
Chen added they expect the hog sector to sustain a 5-percent to 10-percent annual growth in the following years, driven by higher purchasing power.
“Our economy is growing at 6.5 percent and, if that continues, then the requirement for protein will also increase yearon-year,” he said.
If the Philippines breaches the 2.4-MMT hog-output level then it would the country’s highest recorded production since 1980, data from the Philippine Statistics Authority (PSA) showed.
PSA data also revealed that local hog raisers produced 1.087 MMT in the first half, 1.02 percent higher than the 1.076 MMT recorded output during the January-to-June period of 2016. The figure was also the country’s highest first-half hog production since 1980, according to PSA data.
The value of the local hog sector’s production in the first half at current prices rose by 12.09 percent to P113.7 billion in the first half of the year due to the increase in farm-gate price, according to the PSA.
The PSA said the average farm-gate price of live hogs went up by nearly 11 percent to P104.55 per kilogram, from P94.22 per kilogram last year.