Friday, July 1, 2022

The SA pork industry: A perfect storm  

Estimated reading time: 8 minutes

The storm that has gripped the South African pork industry is still in full dramatic swing. It is as if everything came together all at once.

Lately, the industry has had to contend with the following challenges:

  • Domestic maize stock prices that are being forced upwards by external forces.
  • Drought that has hit places such as Argentina, the United States (US) and Europe, which caused not only maize but also soya bean prices to skyrocket.
  • The unexpected conflict in Ukraine that negatively affects sentiment.
  • Uncontrolled expansion in the local pork industry.
  • The above-normal availability of pork due to the excellent improvement in reproduction and production parameters of swine herds, as well as the marketing of heavier carcasses.
  • Reckless meat imports of especially chicken from many overseas countries.
  • Talks that the European Union could again dissolve due to the bankruptcy of several members and Brexit, which still lingers as a bad aftertaste.
  • The US owing the World Bank more than $27 trillion, by far the highest debt of any country in world history.
  • A declining growth rate in China coupled with unexpectedly high inflationary pressures.
  • Local consumers struggling with unusual electricity, fuel and mobile phone expenses. Therefore, they have very little income left to spend on food.

The road ahead

There is no doubt that many pork producers, not only in South Africa but also in many other countries around the globe, are experiencing exceptionally trying times. Older and smaller production enterprises are ready to throw in the towel.

Ironically, the widespread liquidation of herds may lead to a short-term abundance that could put the market under even more pressure, in turn leading to serious shortages in eight to ten months from now. The highest peaks and lowest troughs of pork prices remain and are too volatile to predict.

Producers who can withstand the onslaught will, as in the past, be rewarded for their patience.

Producers are again looking at each expense and there are two important aspects to remember in this regard. The first is to make optimal use of farm production, and the second is to discover and implement ways to negate the extremely high feed costs.

Let’s consider farm production first. Start by asking yourself the following questions:

  • Are all the available buildings on your farm fully utilised?
  • Does each room have ceilings and are the correct temperatures maintained for each phase of production?
  • Has a consultant or expert recently visited you and examined every facet of the production chain?
  • What does your sow culling policy look like and what is the herd’s parity structure?
  • Is feed wastage kept to an absolute minimum?
  • Have the right genetics been purchased? There are so many choices for every discerning producer.
  • Do you understand the possibilities and potential of the animals you farm?
  • Is there a clear gilt replacement policy with the necessary structures and buildings and staff who understand it? There is no reason why first parity sows cannot have figures of more than 14 live births and maintain a farrowing rate of more than 90%.
  • Are the staff on your farm regularly trained, motivated and tested? Do they meet the standards you expect of them?
  • Are consultants constantly challenged to bring new ideas and expertise to the farm?

Feed prices have risen dramatically, leaving almost all producers in uncomfortable economical positions. Consequently, very few producers currently report positive margins. Smaller units, and especially emerging producers who must feed their animals out of bags, have almost no chance against the established home mixers, and even the very best of the latter group of producers currently only demonstrate break-even scenarios.

It is therefore important to realise the following:

  • In South Africa there is little (to no) replacement for maize as an energy source. From time to time, feed-grade wheat, sweet grain sorghum and other sources may replace all or part of the maize component of the diet, provided that prices are competitive. Replacement of cheaper, inferior components in place of ‘expensive’ maize in swine diets is not always a wise decision.
  • It is important that the feed is ground correctly and finely. Research has shown that the grind should be at least between 700 and 900 microns. The fineness of grinding promotes absorption and thus feed conversion is improved.
  • Although modern complicated creep and weaner diets are expensive, the correct and controlled application of these diets in younger animals is strongly recommended to fully unlock their genetic potential.
  • The use of feed additives should be reconsidered in these situations. When feed is expensive, the use of certain growth stimulants can be very cost effective.
  • Specific and controlled application of in-feed or water-additive medications can be discussed with your veterinarian to improve the health status of the herd. Superlative animal health should never be underestimated as a component of intensive farming.
  • Regularly measure the mass-to-age performance of the grower herd and compare it to expected benchmark standards.
  • Improving average daily gain by 50g per day between 70 to 150 days of age reduces the cost of production by approximately 80c/kg. Similarly, each facet of the production chain can be measured.
  • Limit the unnecessary movement of swine. Each time they are moved it takes them one day longer to be ready for slaughter (and up to three days if the practice is poorly performed).
  • Test the market regularly. Talk with the person or institution that buys your pigs. Although the supply of heavy carcasses often shows the best yield, in times of surplus, niche markets may develop for lighter animals.
  • Feed waste remains one of the biggest evils on many farms. Look at and reconsider many of your clumsy practices. The use of automatic feeders remains every modern producer’s first choice. No producer should feed any pig by hand. It is speculated that producers who feed by hand can waste up to 6% of the feed due to poor handling.
  • Sow production is of cardinal importance. The sow herd is considered a fixed asset and the more we can produce from sows, the lower the fixed cost of production of every animal will be. Weaning pigs 100g heavier means that we can market such an animal one day faster.
  • How is sow production measured? Are litters per sow per year more important than piglets weaned per sow per year? What about kilograms weaned per sow per year versus kilograms of meat produced per farrowing crate per year? How important do you consider herd parity to be? How many piglets did each sow produce that left the herd — regardless of the reason for attrition?
  • What does it cost to wean a piglet? How many piglets would you like to wean from each farrowing crate on the farm? How many times would a farrowing crate accommodate a sow in a year?

We also need to consider whether we address the needs of the consumer closely enough. The consumer is the person who stands in front of the fridges at the supermarket, choosing whether to buy pork or not. These are the people who want peace of mind, who trust pork and buy it regularly without hesitation.

Historically, there are three main issues with the marketing of pork. The first is that pork has always been considered too fat. Modern genetics has dispelled this myth and ironically the meat today may be too lean for many consumers. The second issue is the colour of the meat being unpredictable, especially when pigs present with pale, soft exudative (PSE) muscle. The third issue is the smell of pork. The smell, especially from male animals (known as boar taint), has curtailed the preference to purchase pork.

The fact that certain male animals are older than 22 weeks when marketed increases the risk of boar taint. This is happening increasingly in the local industry as the need for heavier carcasses increases. South African pork producers do not practice castration as in other countries where pork is enjoyed. The introduction of a vaccine that negates boar taint has great benefits for the industry. Vaccinated male animals perform better than barrows and they lose a lot of their hormonal aggression while still growing.

Read more about African Swine Fever here.

Producers who market heavy carcasses, and are concerned about pork quality and long-term acceptance of pork products by a discerning consumer, should most certainly consider vaccinating against boar taint.

A word of encouragement

Producers can be assured that the market will experience highs and lows just as in the past. Established producers understand the cycle and never try to overreact. What works for you in good times also works in bad times and attention to detail remains crucial in every intensive industry. Never stop measuring and test every facet of your farming against well-known parameters.

Moreover, be a lifelong learner, whether it is by attending study groups, courses or reading about the latest developments in the industry. The internet is an incredible source of information, but it can also be misleading if the message is not interpreted in the right context. – Dr Pieter Grimbeek, Agri Farmacy