Published on Jan. 29, 2020
Latin American Pork Markets Heating Up
In an area of the world known for hot temperatures, it’s only fitting that for swine genetics companies, the opportunities in certain parts of Latin America are starting to sizzle.
“Latin America is a large region, and each country has its own challenges,” said Luis Prieto Garcia, Managing Director of Hendrix Genetics’ Business Unit Swine (Hypor).
In addition to challenges experienced by much of the pork world, such as difficulty in finding both skilled and unskilled labour, rising facility costs and the risk of new disease outbreaks like African Swine Fever (ASF), certain nations in the area face a hurdle unique to Latin America.
“For major players like Brazil and Mexico, one of the biggest issues is around the volatile exchange rate linked to political instability.” Said Garcia. “It impacts Brazil – a net pork exporter – as they need a strong currency to be competitive. Mexico imports a lot of feedstuffs from the United States, so the exchange rate affects them as well.”
Of course, with challenge comes opportunity.
“The trend we are seeing in Latin America is the increase in the consumption of pork meat,” said Nelson Adrian Restrepo Echavarria, Key Account Manager, Latin America – Swine for Hypor. “Countries like Peru have doubled their consumption in five years, and Colombia has gone from 4 kg to 11 kg consumption per capita in a short period.”
Yet overall, pig production in Latin America is relatively low, with many countries relying on imports from Canada and the United States to satisfy demand. Historically, one genetics company dominated the region, leading to increased costs for breeders and lower product quality due to a lack of competition. Fortunately, that picture has changed dramatically in recent years.
Hypor started working in Mexico in 2001 on a small scale, and we are now the second largest genetics company in the country with a 20 per cent share of the market,
Hypor has also partnered with prominent companies in several countries who have exclusive dealerships to produce their genetics locally, yet with a continuous genetics link to, and full support from, Hypor nucleus facilities in Canada. These countries include Ecuador, Columbia, Dominican Republic, Peru and Guatemala.
In addition, the company now has new export customers in Panama and has opened a new distribution centre in Costa Rica.
In its commitment to continual growth, Hypor is targeting Brazil for 2020. The company plans to start production there in the new year, giving them access to countries where they lacked a presence due to logistical barriers: Argentina, Uruguay, Bolivia, Paraguay and Chile.
The evolution for Hypor in Latin America has been spectacular. In just four years, we expanded our presence from three countries to ten. We have established a reputation throughout the region for products that offer the best possible return to pork producers.
Given that much of the export activity from Latin America flows to Asia, Hypor is perfectly positioned to help producers excel in serving that market.
“Like much of the world, Latin America is seeing fewer small producers in favor of larger companies,” said Garcia. “Our breeding philosophy addresses the needs of the vertical integrator, and our Magnus Libra* cross is a high quality, efficient line that fits nicely with consumer demands in countries like China and Japan.”
For that segment of Asia that seeks a premium pork product, the Hypor Kanto has been well received. Notably, Hypor is the only genetics company with two Duroc lines that are so well differentiated, and that’s good news for clients seeking to maximize returns.
“Latin America is a key area of development for Hypor,” said Garcia. “Over the last several years, it has been one of our biggest success stories, and we have yet to tap the potential of Brazil, which is the world’s fourth largest pork producer.”
Though Garcia and his colleague are currently servicing Latin America, he will be developing a local team based in Brazil to meet the demands for Hypor products and make the most of growth opportunities for the company.
“Brazil is important to us, because even as pork markets experience ups and down in terms of price and supply and demand, protein should be produced in countries like Brazil and Argentina where there is water, land and feedstuffs available at a reasonable cost,” said Garcia. “You can have trade wars and commercial barriers creating some disruption in the normal trade of proteins, but in the long run, those are the best places to produce pork. The fact that our long-term plan includes Brazil, which represents the origin of protein in the future, is very exciting.”
As Hypor continues to expand its role in Latin America, there is plenty to get excited about for current and future clients in the region.
Our company represents a world class product and the best alternative when it comes to value delivered to our customers.
When you take those ingredients, and add the exceptional technical service and customer support for which Hypor is known, and which Latin American producers deserve, you have the perfect recipe for success.