Swine production costs increase in all countries

A report from InterPIG, an international group of experts on swine industry economics, compared the costs of swine production in 2021 in 18 countries. In 2021, these costs, expressed in euros, varied by almost 1 euro/kg carcass between Central-West Brazil and Italy, showing the diversity of situations. While Italy, as do certain northern European countries, develops differentiated products (heavier pigs, free-range animals, etc.), countries on the other side of the Atlantic produce cheaper pigs with lower production costs.

Feed prices

The commodity crisis that began in the autumn of 2020 and was then accentuated by the Russian-Ukrainian conflict had an upward impact on the cost of pig feed in all countries, and thus on production costs. In Italy and Great Britain, the price per carcass exceeded €2/kg. The ranking of the countries remains the same, but the rise in feed affected the countries on the other side of the Atlantic more, which reduces the difference in production costs with Europe. Denmark, for the first time since the creation of this comparison, had lower costs than Canada. In 2021, Canadian canola (genetically modified canola) production was one of the worst, and wheat harvests were also poor, positioning the country as an importer of raw materials in times of crisis. The countries of the European Union, which are grain producers, are in principle more protected and the price increases occurred to a lesser extent.

Production costs

The differences observed in production costs are explained by the prices of production factors and by the technical performances of the farms. Feed cost, the most significant cost, ranged from €0.82/kg carcass in Finland, which benefited from very low feed prices, to €1.45/kg carcass in Italy. In 2021, feed accounted for 50% to 83% of the total cost depending on the country. The weight of the costs not attributable to feed depends on the price of facilities, the cost and productivity of labor, and miscellaneous expenses (restocking, sanitation, water, and energy). The variability of the labor category is explained by the differences between countries in the hourly cost of labor (from 2.3 to 27.1 €/h). The variations in the price of new construction are significant, ranging from €2,230/sow in Canada to more than €12,000/sow in Finland and Austria. Denmark remained the most efficient in terms of sow productivity with 34 piglets weaned/sow in production/year. Farmers in France weaned 30.1 piglets/sow, very close to Germany's 30.2 piglets/sow.

Prices received by swine producers

In 2021, prices received fell across Europe (14 out of 18 countries) due to lower imports from China, high European supply, and the spread of African swine fever in Germany. Combined with rising production costs, the decline in prices received affected farm results. On the other hand, the United States and Canada, driven by a strong price increase (by +52 cents and +68 cents, respectively), saw better results than in 2020. North American markets experienced a significant drop in pork supply in 2021, with the United States benefiting from strong domestic and foreign demand that benefited Canadian exports. At the European level, Denmark and Spain maintained positive results (+4 cents and +2 cents respectively), while Germany and the Netherlands slumped (-47 cents and -33 cents respectively). The result for farms in France was also negative (-12 ct €).