However, since the global crisis of October, 2008, which caused an immediate drop of 45 per cent in pig prices in Brazil due to reduced exports, losses have been constant for producers in the south of the country and, even in other regions, profits have been meager and short-lived when they did appear.

This sad situation has given rise to an adage among producers: “The situation is never so bad that it can’t get worse.“ When I was a producer, I witnessed this many times. When everything that could go wrong had gone wrong (pig prices falling, feed prices rising, exports banned by an important importing country), along would come yet another problem to make things worse (disease outbreak stopping pig movements, new taxes on production, etc.).

And the news that floods in daily over the Internet proves this adage time and time again. In the south of the country, the greatest problem is lack of buyers. A large part of production is now internal to the big integrators/processors that are self-sufficient and have not bought on the spot market in recent years. And their number is falling constantly due to mergers and fusions. One example: what used to be three large companies (Sadia, Perdigão and Avipal) have all been rolled into one huge conglomerate, BR Foods.

A medium-sized plant which was bought over by Doux from France some years ago has been in financial difficulties over the last year or so, and is now on the market. Meanwhile its producer suppliers have had difficulty getting payment, often having to wait for months.

So for those brave souls who still remain in production in the south, the biggest challenge is to find a buyer for their pigs. One large producer adopted a new strategy. He takes his lorry loaded with market hogs to one of the few remaining medium-sized plants and tells the owner to take the pigs in, pay whatever he wants and whenever he wants. This, as Jim Long would say, “is not price supportive“! Prices, dropping weekly, are now around US$ 0.43 per lb live weight, against a production cost of US$ 0.57 or more.

In the pig producing states of the center and center-west of the country, the situation may be slightly less dramatic, but losses are still heavy. The state of Mato Grosso produces vast quantities of corn and soybeans. In some ways it is the Texas of Brazil – everything there is bigger, even the armadillos. A farmer with only 2,500 acres is considered a vegetable farmer. And the hog units are bigger too, with many having 3,000 sows upwards. Traditionally, the margin on hog production was good there, due to very low corn and soy meal prices, even though the price of hogs was slightly lower than other regions due to shipping distances.

But now the situation has changed. Due to high feed prices and an extremely low hog price (about US$0.50 per lb live weight), producers are losing about US$30 per head. On a 5,000 sow unit, that mounts up quickly and it has been going on for months. The state pig association is announcing the demise of pig production in the state.

São Paulo state has also traditionally had better prices than the south. But the market has collapsed there too, leading to prices of about US$ 0.49 per lb, with costs similar to those in the south.

There is an unprecedented joint effort by pig associations across the country, coordinated by the national pig producer association ABCS, to garner political support. As a result, there will be a public hearing in Congress in Brasília on July 12, attended by the considerable number of Deputies who support the agricultural lobby and producers from many states.

However, experience suggests that the outcome will have little effect. While producers dream of a “just price“ for their hogs, Brazil’s market economy is determining this just price, which is very low due to constant over-supply of the market, largely due to the number of big units established by the integrators, squeezing the independent producer’s space.

And new lines of debt financing, another favored plea, if granted, will have the result of allowing producers to continue oversupplying the market at a loss, building up their debts even more.

With no light at the end of the tunnel, it seems to me that smart pig producers will cease production as fast as possible. This is what I decided to do, two years ago, but five or ten years later than I should have. I have not regretted it once since then. But I still grieve on seeing what the remaining producers are currently going through. I know the anguish they are suffering.