Our Observations

• Brazil’s hog prices are profitable with slaughter hog prices at 69US¢ per lb, and cost of production 60US¢ a lb. One large producer told us they were making US$21 per market hog. Brazil is one of the major pork exporting countries.
  
  
• Feed prices are similar to the USA and have gone up about 20 per cent in the last two months, just like the rest of the world.
  
  
• PorkExpo 2010 was a professional well organized exhibition. There was an extensive list of speakers from around the world. The exhibits were big with some companies at the top end probably burning through $200,000 US in space, exhibit, personnel, hospitality, and hotels. This is big time outlay.
  
  
• At PorkExpo 2010 there was very few swine equipment companies. Taxes on imported hog equipment are around 50 per cent and then there are domestic taxes. Some industry people told us imported swine feeding equipment ends up at almost double in price when all taxes and tariffs are accounted.
  
  
• The high domestic tax on equipment leads to many producers making their own gestation stalls, penning, etc...
  
  
• Brazil’s producers are finding it increasingly challenging to find swine production workers. We were told that in farrow to finish operations labour costs are almost 15 per cent of the total production costs when all costs are calculated. This is very similar to North America. On a go forward basis Brazil will increasingly move to greater barn automation. The high taxes on pig equipment and technology (almost 100 per cent) makes the pay back definitely longer. This is certainly a disadvantage for Brazil’s producers.
  
  
• In Brazil the highest hog prices are in October – November the complete opposite of North America which usually has the lowest yearly price in October – November. The seasonal effect of hot summer months are totally opposite in the Northern Hemisphere (United States) compared to the Southern Hemisphere (Brazil). This is a positive for prices in the world’s export market. In the next few weeks as North America’s hog supply increases seasonally Brazil is going down. The current tightness of supply in Brazil was reflected in stories we heard of hogs being marketed down to 200 pounds or 90 kg. We expect the lower hog numbers in Brazil will be price supportive in the coming weeks for not only Brazil but the rest of the world as Brazil will have less pork to export.
  
  
• Brazil from what we can observe is not expanding its sow herd yet. Like North American producers they lost money for two years plus. There is lots of healing needs to be done.
  
  
• For what it’s worth we observed that there were no swine barn construction companies at Pork Expo 2010.
  
  
• At Agriness, a pig record keeping system gave out its awards for top producers and also averages on their system.

• Agriness’ average of 25.42 pigs weaned per sow reflects the intense and capable production of Brazil’s producers. The low pre weaning mortality of 8.68 per cent is significantly better than North America’s average of near 12 per cent. Many sow units in Brazil have 24-hour staffing in their farrowing rooms. This decreases stillborns and pre-weaning mortality.
  
  
• From a personal perspective, we are quite excited about the potential for Genesus in Brazil. The record-breaking genetic potential of Genesus and the production intensity in Brazil will push weaned pigs per sow over 33 in the near future. Our major competitors in Brazil are PIC and Dan bred. Other companies are there but they are not competitive.
  
  
• Feed prices in Brazil like North America and the rest of the world have jumped dramatically in the last 60 days. This will slow expansion plans in the hog industry. On the crop side its spring time in Brazil (Southern Hemisphere) and with grain prices jumping higher. They expect maximum plantings to be undertaken.

Summary

Brazil is and will be a major competitor in Global Pork Markets. Their productivity, land, and grain resources combined with a can do attitude makes a formidable combination.