The growth rate in Argentina's pork industry is astounding. I ate lunch with producers who manage 1000 sows who were expanding to 3000. All plan on doing it as traditional farrow to 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.

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