This week I’m writing my blog from a convention center in Rosario, Argentina. This is my second day in Rosario working with pork producers and I will be here until Sunday evening when I return to the US.
The pork industry in Argentina is undergoing massive expansion. In the past 3 years they have more than doubled the size of their herd. I’ve had conversations with producers who talk about doubling and tripling their herd in the next year. Common numbers are to go from 1000 sows to 2-3000 sows in one year.
As near as I can learn, all of this expansion is being driven by domestic demand. There are limited pork exports from this country, although every producer talks about the goal of becoming a net exporter. They use foot and mouth vaccine in parts of this country so their potential export markets are countries that will accept products from a country using the vaccine. For the US, this means no competition in such places as Japan.
Their national elections are this Sunday so much discussion as to the outcome. They have very high inflation and the taxes they pay on any ag products exported are massive – as much as 50% of the value of the commodity at the Rosario port in some cases.
I asked a producer at supper last evening how he was financing his expansion from 1500 sows to 3000 sows. He said he must pay 35% interest on the money he borrows and you can only borrow for 1 year at a time. Even then it may take up to 6-9 months to secure a loan from a lender.
Almost 100% of their expansion/production is traditional farrow-finish with all of the pigs at one location. I haven’t had a conversation with anyone in the industry who has any experience with contract production or even multi-site production. The expansion is being done by grain (corn-soybean) farmers who are seeking alternative markets to their current export only option. This means they are building feed milling facilities on-farm along with the expansion.
So far it appears that the value of the swine manure to the cropping enterprise is not considered as they do their economic analysis. They have been surprised when I talk about barns being constructed in the US strictly because they want the manure.