Pork margins are deteriorating – :: El Litoral – News – Santa Fe – Argentina

While imports increase

Pork margins deteriorate

Campolitoral

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The Association of Pork Producers said that the import of pork meat increased by 14.2% in the first half and was again alerted to local producers, who warned against the closure of small farms because of the impossibility of competing on equal terms with other countries such as Brazil, d & rsquo; where the largest amount of meat enters.

Precisely, an investigation of the entity In the first six months of 2018, 19,490 tons of pork entered the country, doubling the volume of purchases compared with the previous year.

Carlos Ingino, a member of the board of directors of the entity, acknowledged to LT 10 that the picture is very complicated "because" a large part of imports come from Brazil. From there, many frozen cups come in; for example the bondiola, which equates to 50% of all that is sold in Argentina, "he said.

The local businessman explained that this situation had a direct impact on primary production and industry in Argentina, growth in production. "Many small farms are already closed and with the lack of corn they will close much more," he warned.

Profits

At a consultation, Ingino said that in Brazil a banned anabolic is used in our country. "This gives Brazilian producers 15% more profitability. And this commodity has come in and we are not allowed to produce with it, it's unfair competition, "he said.

Added to that the existence of large companies in the neighboring country, able to perform the whole process of production and slaughter. "In contrast, in Argentina, the links are numerous, which makes the activity even more expensive, added to the lack of access to credit. These obstacles and differences make us less competitive, "he concluded.

In this context, the Institute of Studies on the Argentinean and Latin American Reality of the Mediterranean Foundation warned in a recent study that the intensive livestock margins they have deteriorated significantly so far in 2018, with no floor until June, last month covered by the report. "It happens that the costs have evolved much faster than revenues. For example, the former increased by more than 60% between June 2017 and June 2018, while the latter were only 21%, says one

Low yield

In June 2018 farm of 250 mothers that is used as a reference shows a net margin (discounted income all costs) of – $ 6.8 per kilogram produced if location south of Córdoba (Malena) and – 8.3 $ is considered if the location is Rosario. Even without depreciation, this type of farm loses resources (- $ 2.1 / kg and – $ 3.6 / kg, respectively). The 500-mother, high-efficiency farm in Malena had a margin of {body}, 0 per kilo in June 2018 (+ $ 3.2 if depreciation is not deducted). And the same type of farm, but located in Rosario lost money, with a net margin of – $ 1.3 per kilogram produced (+ $ 1.9 if it does not replace the depreciated capital).

Deep crisis

The current crisis It would be deeper than in 2016. In the first half of 2016, the small, low-productivity farm in southern Cordoba has accumulated 5 consecutive months of negative margins, a number of months similar to the one already this year; in June of the same year, the net margin, measured at current prices, was – $ 5.3 per kilo, a loss of 20% lower than in June of this year (-6.8 dollars per kilo). In the case of the larger-scale, high-productivity farm, the net margin was slightly positive in mid-2016 ($ 0.9), while it is $ 0 this year.

An element that aggravates the scenario, and that is not considered in the previous calculations, is the reduction of the VAT rate from 21% to 10.5% in the sale of products related to the chain (capón , cuts of meat), made in February. 2018, which generates significant balances in favor of the producer (tax advances)