Pig prices in China almost 10 times higher than those in the US
There is a huge discrepancy in the global pig market, with American hogs having the lowest price, while pig prices in Asia are exploding due to the ASF situation.
According to Simon Grey, General Manager Russia, CIS, and Europe at Genesus Inc., the situation is almost ironic and defies the common logic as "the sales price for the farmer is very far from stable globally. It also does not take a genius to see that the lowest cost producers (North America) today are losing the most money and the highest cost (China) are making the most. Total opposite of what conventional wisdom says", explained Simon Grey.
Using the hog prices in the US as a benchmark for the lowest level of cost in the global market, Mr Grey discovered that the price in Asia / China is 6.63 to 9.79 times higher than in the USA!
"So what has got us to this position? Maybe our obsession with the cost? Perhaps if we changed focus to profit, rather than chasing the lowest cost we could create a more stable and sustainable business," he added.
|
USA |
1.00 |
|
Canada |
1.39 |
|
Mexico |
2.07 |
|
Brazil |
1.90 |
|
Russia |
2.95 |
|
China |
9.79 |
|
Spain |
3.19 |
|
France |
2.79 |
|
UK |
3.54 |
|
Vietnam |
8.09 |
|
South Korea |
6.63 |
As an example , Brazil has cost per pig almost double compared with a US farmer but it makes a profit on China. The same situation for Spain, with cost per pig 319% higher than in the US but with a comforting profit reported by Spanish pig producers.
"As producers, we complain and do nothing other than focusing more on reducing our cost even further. We stop buying good genetics, we stop maintaining our farms, we use cheaper food, we stop vaccinations/treatments, we reduce our production staff! Time perhaps to totally rethink conventional wisdom. Being the lowest-cost producer of a product nobody wants to buy will not make you a PROFIT," concluded Simon Grey.
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