The Pork Industry in Argentina

I’m writing this blog from an auditorium in Salta, Argentina where Dr Larry Jacobson (extension ag engineer at the University of Minnesota) and I are doing presentations to swine producers and veterinarians from Argentina, Chile and other South American countries.

While Argentina is not thought of as a large pork production nation, it has an industry that is growing. The government is putting money into the industry because they view pork production as a value added industry for their corn and soybean producers. Currently, Argentina has the lowest feed cost per unit of gain from any country I’ve been involved in across the world. One producer told me his feed cost was $0.25 per kg of gain or about $0.11/lb gain. He was located 500 km from a port so he was paying local prices for grains.

All of the producers I talked with were concerned with the US drought caused world wide rise in grain prices. Like readers of this blog, I couldn’t answer the common question – how high will prices go and what will be the impact on world grain trade?

Argentina is interesting as a grain producing country. If you grow corn or soybeans and sell it for export, the government takes a large piece of your income. If you modify the grain (thought by the government to be value added), you pay less to the government. Thus, Chile producers who buy corn in Argentina buy a product that has a very small amount of salt and soybean meal added – this is now called feed, not corn. Producers sell this product for less than just corn since they get to keep more of the income. Thus, corn from Argentina has 2 prices depending on what you buy.

The pork industry has begun to install tunnel ventilation for summer heat relief. However, the big problem for many is chilled pigs in winter conditions. I looked at several seasonal closeouts and their sale weights decline in the winter and feed conversion gets worse in winter. In digging into the problem on many farms, it turns out they don’t do a good job of minimum ventilation. They often use the tunnel curtain as the ventilation inlet for all seasons of the year, so you can imagine conditions in the barn when the outside temperature is 40F or colder during winter nights, especially since they use a minimal amount of insulation (R10 or so in the ceiling/roof) and no supplemental heat.

It’s a good thing they have cheap feed when feed conversions for grow-finish climb to 3.3 or worse during winter closeouts.

Their industry is expanding. Today I reviewed the site plan for a producer who was going to grow to 12,000 sows and go from 1 site production to 2-3 site production. I also talked with several advisors working on other expansion projects of similar sizes.

Like the US, pig production is following grain production – as their ability to grow corn improves, and as government policy impacts export of the grain, Argentina agriculture will use more of the grain for animal agriculture.

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