That trend has been similar with pig production. However, the recent past has provided some hard lessons. Today, pork producers and integrators are trying to meet challenges with new strategies. Here is a fresh look at the past, present and future of
A Bit of History
Of course, things have changed dramatically. From the 1960s to the 1980s, Brazil, Canada, Japan and Mexico swapped positions many times within the second tier of major producers behind the leaders China, United States, the eventual European Union and the former Soviet Union. By the late 1990s,
In 2007, FAO estimated
Things started to change slowly in the mid-1980s. In 1996, a larger change occurred, as
In the last five years,
Challenges of the Recent Past
In recent years,
Again, FMD surfaced on some cattle ranches in the state of Mato Grosso do Sul (and, controversially, in Paraná state as well). Export embargos and barriers from many countries followed once more. Most important to the pork sector, exports to
A Snapshot of the Present
Today, industrial systems account for more than 80 percent of
In recent years, growth has occurred in the West-Central states of Goias, Mato Grosso, and Mato Grosso do Sul. These are regions of cerrado (the Brazilian savanna) and have been the basis for huge grain production growth. Coser believes that this grain development is a positive factor that will favor growth in the region. But he also believes that growth will continue in the south. “In the Centre-West there are some logistic problems, and the main consumer markets are in the country’s south and southeast portion,” he adds.
In terms of major players, three companies stand out — Sadia, Perdigão and Aurora, in that order. With nearly 31.8 million hogs slaughtered commercially in 2007, these three major players account for more than 35 percent, or 11.24 million hogs. The combined volume of the next 20 associates of the Brazilian Pork Industry and Exporter Association (ABIPECS) won’t equal that amount.
Export-wise, the ranking is a bit different and less steep. Perdigão and Sadia are again the major players. Together they comprised 36 percent of
The industry claims that up to 85 percent of production is integrated. However, Coser challenges that figure. “It depends on what one considers as integrated,” he notes. “If we take the classical type, with the industry providing nearly everything and the producer coming with the building and labor, I don’t believe it’s that high. But it’s surely more than 65 percent.”
He does point out that when pork production came to the West-Central, the nature of integration changed. “There, the industry met a new kind of producer, who already was a big entrepreneur in the agricultural sector. The production units are much larger than the small/medium properties in the south, and the bargaining power also is stronger. Farmers in the classic production regions are associated in co-ops,” Coser adds. “I do believe that there will not be producers outside the industrial process.”
A New Look at Pork
Betting on the domestic market but feeling it needed a little push, ABCS launched a campaign, loosely translated to “a new look at swine meat.” “Our consumer study showed that Brazilians prefer the taste of pork but hold some prejudices related to perceived health impacts,” Coser says. The goal is to show that pork can be safely consumed the same as beef. “We also will work on the retail market to present fresh pork cuts similar to beef cuts that consumers already know, and to tackle the inadequate presentation at sales points and the perception of impractical cuts or large ones associated with holidays,” he adds. The campaign will later involve producers and the mass media.
ABCS’ goal is to increase
It will serve as a stepping stone. “Expanding the domestic market will provide a firmer and safer foundation upon which
Peering Into the Future
Future prospects for
USDA, however, projects less growth for Brazil both in terms of exports and production. It foresees Brazil remaining the fourth-place producer, reaching only 3.300 million MT by 2018. Export-wise, USDA predicts growth to 975,000 MT as of 2018. Central to USDA’s estimates is the view that import restrictions will continue on Brazilian pork in markets such as Japan and South Korea.
Certainly, Brazilians have their own plans, especially for the export sector. In the international arena, ABIPECS has joined with the Brazilian Trade and Investment Promotion Agency to promote Brazilian pork abroad, with Russia as the main target. According to Pedro de Camargo Neto, ABIPECS president, the goal is to increase those exports from the current 270,000 MT to 325,000 MT by June 2009.
“We also have a long-term objective to open Japan, South Korea and Mexico to Brazilian pork,” de Camargo Neto notes. “This involves closely following the actions of governmental bodies in the sanitary arena and supporting them.”
He points to the impact on pork from FMD outbreaks in cattle and the ongoing FMD cattle vaccination in many states. “FMD outbreaks in South America have always been associated with cattle, never swine. Our farms and plants are among the world’s best,” de Camargo Neto adds. “We just need a focused, collective sanitary-quality effort through the public services. In parallel comes the work of convincing authorities of those countries that we can guarantee such quality.”
de Camargo Neto sees the sector’s progress moving naturally from less demanding markets, with gains in volume, toward more demanding ones, which have higher returns. Another natural evolution that he sees involves adding value, moving from the current focus on carcasses through to boneless cuts to frozen, fresh cuts to chilled cuts and ready-to-eat dishes.
If all of that unfolds, then the previous forecasts might fall short. Taking Brazil’s recent history for broilers and beef into account and changes for the pork sector might grow even larger.