More thoughts about Argentinian pork production industry

Some more thoughts about Argentinian pork production as I head home. As I wrote, the growth rate is astounding. I ate lunch with producers with 1000 sows who were expanding to 3000, 1500 to 3000, 1000 to 2000, etc. All plan on doing it as traditional farrow-finish sites with no long term packer arrangement, etc.

While I didn’t make notes, producers are very aware of corn and soybean basis. All exports are along the Parana River which originates in Brazil and there is no rail/water transport to these ports (80+% from Rosario port area). Thus transport cost on roads that are ‘ok’ is the biggest variable in basis. As they move away from the river price, the desire to use pigs to add value increases. Reminds me of NW Iowa, SW Minnesota, NE Nebraska and SE South Dakota in the 1970-‘s-80’s when livestock was the production system to mitigate the grain basis versus Mississippi River ports.

At the same time, the vast majority of the slaughter plants are in Buenos Aires area so there is also a transportation basis in pig prices. I talked with several producers and veterinarians who talked about 3-400 km transport distances on ‘ok’ roads.

All of the transport vehicles for both grain and pigs are steel versus our aluminum trailers so net loads are often smaller due to the vehicle gross weight. I saw pigs in double deck transports with no roof/top. I asked about sunburn on the way to slaughter and was told it can be a problem. I can’t help but wonder if once in a while a pig doesn’t figure out how to leap over the side.

For now, all of the growth in numbers is being consumed within Argentina. The country uses foot and mouth vaccine so export opportunities are somewhat limited. Like the US industry, items such as bungs, sow uterus, ears, snouts, etc. are exported, primarily to China.

On Wednesday evening I spoke to a small group of producers who share production and cost records. Reminded me very much of the Swine Enterprise Records program that Iowa State University and the University of Nebraska ran 20-30 years ago. Unlike the University programs which benefited from funding for Extension Specialists as coordinators, this program is entirely coordinated by the producers as they try and push themselves to be among the best in Argentina.

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