Swine Industry in the Swine Industry in the PhilippinesPhilippines

Presented by: Aeroul Franz Berro

By: EDWIN G. CHENPresident

Pork Producers Federation of the Phils., Inc.

Swine raising business / Hog Production Business

Swine raising is an age old backyard Swine raising is an age old backyard business in the Philippines. Currently about business in the Philippines. Currently about 70% of the swine industry is composed of 70% of the swine industry is composed of small raiser / backyard raisers. And way small raiser / backyard raisers. And way back 2004 the Philippines is in the top 20 back 2004 the Philippines is in the top 20 countries in terms of sow population. It only countries in terms of sow population. It only shows how we Filipino love to eat pork. And shows how we Filipino love to eat pork. And swine raising is a good business or sideline swine raising is a good business or sideline to invest .to invest .

Breeds Of Pigs in the PhilsBreeds Of Pigs in the Phils

There are 3 major breeds used:There are 3 major breeds used:

Landrace x Large white x Duroc Landrace x Large white x Duroc

Swine Business could be fattening only, Swine Business could be fattening only, breeding/piglet production, or breeding to breeding/piglet production, or breeding to

fattening.fattening. Fattening Fattening = Here a farmer buys a piglet which is around 30-45 days, = Here a farmer buys a piglet which is around 30-45 days,

the animal is already eating solid foods and not milk dependent, and the animal is already eating solid foods and not milk dependent, and the weight would be around 7.5-10 kgs. The farmer will then care for it the weight would be around 7.5-10 kgs. The farmer will then care for it for 4 months or 85 kgs before selling it. The usually income would be for 4 months or 85 kgs before selling it. The usually income would be 10-20% of total investment.10-20% of total investment.

Breeding/Piglet productionBreeding/Piglet production= The farmer focus is on it’s sow. To give = The farmer focus is on it’s sow. To give further idea in this business, a pig would reach maturity around 5-8 further idea in this business, a pig would reach maturity around 5-8 months of age. And when it reach it’s 2-3 heat or at 110-120 kgs she months of age. And when it reach it’s 2-3 heat or at 110-120 kgs she could then be breed. The pregnancy would last 114 days. The sow could then be breed. The pregnancy would last 114 days. The sow would farrow (manganganak) 2 times a year and it’s litter will then be would farrow (manganganak) 2 times a year and it’s litter will then be sold when it reach around 30-45 days or 7.5 kg -10 kg. On average a sold when it reach around 30-45 days or 7.5 kg -10 kg. On average a sow would give birth to 10 piglets above.sow would give birth to 10 piglets above.

Breeding-fatteningBreeding-fattening= This is the mix of the two system and the most = This is the mix of the two system and the most ideal type of swine raising.ideal type of swine raising.

consider the following information consider the following information before starting a swine enterprise:before starting a swine enterprise:

1. where to market your animal?1. where to market your animal?

2. location of your farm (if near residential, 2. location of your farm (if near residential, market place, water source, road proximity, market place, water source, road proximity, etc.) etc.)

2. location of your farm (if near residential, market place, water source, road proximity, etc.)

3. financial consideration (initial capital: 3. financial consideration (initial capital: P80T/sow needed for the 1st yr of P80T/sow needed for the 1st yr of implementation of the farm. This includes implementation of the farm. This includes cost of the sow, feeds, biologies, building cost of the sow, feeds, biologies, building and equipment for all classes of animals)and equipment for all classes of animals)

Building of equipment: P 40T/sowBuilding of equipment: P 40T/sowFeeds: at most P 30/day/sowFeeds: at most P 30/day/sowGilts(7 mos old) costs P9,500Gilts(7 mos old) costs P9,500Boar costs: P20,000 - P30,000Boar costs: P20,000 - P30,000Medicines and vaccines: 3% of the total cost Medicines and vaccines: 3% of the total cost of feed of feed

Ref: http://pinoyfranchising.blogspot.com/2006/09/franchising-swine-hog-raising.htmlRef: http://pinoyfranchising.blogspot.com/2006/09/franchising-swine-hog-raising.html

Livestock & Poultry Production

2010 LIVESTOCK AND POULTRY 2010 LIVESTOCK AND POULTRY INDUSTRY PerformanceINDUSTRY Performance

Top 10 Commodity Producers for Top 10 Commodity Producers for 20102010Value in Current PricesValue in Current Prices

RankRank Sector Sector

Total AgricultureTotal Agriculture

Value Value (in Million Php)(in Million Php)1,251,157,351,251,157,35

% Share % Share

100.00%100.00%

11 PalayPalay 231,844.28231,844.28 18.53%18.53%

22 HogsHogs 172,542.74172,542.74 13.79%13.79%

33 ChickenChicken 112,972.82112,972.82 9.03%9.03%

44 BananaBanana 106,485.68106,485.68 8.51%8.51%

55 Fisheries (Aquaculture)Fisheries (Aquaculture) 82,839.5082,839.50 6.62%6.62%

66 CoconutCoconut 81,896.0181,896.01 6.55%6.55%

77 Fisheries (Municipal)Fisheries (Municipal) 77,653.6577,653.65 6.21%6.21%

88 CornCorn 70,017.2670,017.26 5.60%5.60%

99 Fisheries (Commercial)Fisheries (Commercial) 60,788.4960,788.49 4.86%4.86%

1010 Chicken EggsChicken Eggs 33,714.0733,714.07 2.69%2.69%

Hog: Inventory by Age and Farm Type, 2010

FARM TYPEFARM TYPE 2010 P2010 P

TOTALTOTAL BackyardBackyard CommercialCommercial

SowSow BackyardBackyard CommercialCommercial

GiltGilt Backyard Backyard CommercialCommercial

FattenersFatteners Backyard Backyard CommercialCommercial

GrowersGrowers BackyardBackyard CommercialCommercial

OthersOthers BackyardBackyard CommercialCommercial

Source: BASSource: BAS

13,397,78913,397,7899,542,1929,542,192

3,855,5973,855,597

1,674,7781,674,7781,174,0111,174,011

500,767500,767

619,902619,902490,340490,340129,562129,562

3,267,3123,267,3122,345,2022,345,202

922,110922,110

3,941,7283,941,7282,867,0402,867,0401,074,6881,074,688

3,894,0693,894,0692,665,5992,665,5991,228,4701,228,470

HOG: Inventory by Age Classification, 2010

Sow

Gilt

FattenersGrowers

Others

Sow 12.50%

Gilt 4.63%

Fatteners24.39%

Others29.07 %

Growers29.4%

Hog Inventory, % Distribution by Farm Type, 2010

Commercial, 28.78%

TOTALTOTAL 13,397,78913,397,789

BackyardBackyard 9,542,1929,542,192

CommercialCommercial 3,855,5973,855,597

Backyard, 71.22%

HOG SECTOR PRODUCTION PERFORMANCE HOG SECTOR PRODUCTION PERFORMANCE 2.29% Average Growth Rate (Volume) 2.29% Average Growth Rate (Volume)

HOG FARM GATE PRICESHOG FARM GATE PRICES

MONTHMONTH 20042004 20052005 20062006 20072007 20082008 20092009 20102010

JANUARYJANUARY 80.1180.11 91.6691.66 82.1582.15 82.7882.78 99.8699.86 102.00102.00 113.09113.09

FEBRUARYFEBRUARY 83.4583.45 90.4290.42 82.0582.05 83.8183.81 97.8897.88 104.20104.20 112.97112.97

MARCHMARCH 87.4587.45 90.8690.86 82.8082.80 86.1786.17 106.84106.84 101.08101.08 113.43113.43

APRILAPRIL 88.2288.22 90.0690.06 84.5784.57 89.5289.52 110.26110.26 96.4996.49 114.51114.51

MAYMAY 86.0686.06 90.8690.86 86.9086.90 91.7491.74 107.93107.93 95.7895.78 114.78114.78

JUNEJUNE 83.8983.89 90.9090.90 88.7488.74 91.9091.90 104.19104.19 90.2390.23 111.57111.57

JULYJULY 82.3182.31 90.5990.59 88.6488.64 90.9490.94 99.2099.20 88.2288.22 107.77107.77

AUGUSTAUGUST 80.1680.16 89.1489.14 85.9585.95 88.6388.63 93.8393.83 91.3091.30 102.92102.92

SEPTEMBERSEPTEMBER 78.0878.08 87.0387.03 83.4583.45 85.7885.78 85.3085.30 97.2797.27 98.8098.80

OCTOBEROCTOBER 79.6679.66 84.3184.31 81.4681.46 80.9680.96 84.0084.00 101.52101.52 94.8094.80

NOVEMBERNOVEMBER 84.3084.30 82.9482.94 81.0381.03 81.5281.52 86.4086.40 105.72105.72 95.1495.14

DECEMBERDECEMBER 89.2889.28 82.4282.42 82.0582.05 85.7085.70 96.4296.42 110.91110.91 101.2101.2

AVERAGEAVERAGE 83.5883.58 88.4388.43 84.1584.15 86.6286.62 97.6897.68 98.7398.73 106.75106.75

HOG FARM GATE PRICESHOG FARM GATE PRICES

75

80

85

90

95

100

105

110

115

120

JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTO

BER

NOVEM

BER

DECEMBER

2004

2005

2006

2007

2008

2009

2010

HOG INDUSTRY ANALYSIS

IDENTIFIED CONSTRAINTS

High cost of inputs / high logistics cost Poor technology level among backyard

raisers

Limited access to credit

Low breeder base / low productivity Incidence of diseases (HC, TGE, PRRS,

Swine Flu, PCV,etc.)

Smuggling/ influx of cheap imports Wide gap between retail and farm gate

prices

Climate change

STRENGTHSSTRENGTHS

Preferred meat in the marketPreferred meat in the market

Access to good geneticsAccess to good genetics High degree of organization of High degree of organization of producersproducers

Educated farm managersEducated farm managers

Large institutional marketsLarge institutional markets

Strong potentials to exportStrong potentials to export

FMD-free statusFMD-free status

SPECIFIC OBJECTIVESSPECIFIC OBJECTIVES

SWINE SWINE

• Self-sufficiency in pork Self-sufficiency in pork

• Export ventures to other countries Export ventures to other countries

• Maintain Disease-Free Status for FMD Maintain Disease-Free Status for FMD

• Reduction in production cost and achieve cost-Reduction in production cost and achieve cost-

efficiencyefficiency

• Developed Value added products for domesticDeveloped Value added products for domestic

and export marketsand export markets

ConcernConcern Private Sector InvestmentPrivate Sector Investment Priority Support Services Priority Support Services Needed from GovernmentNeeded from Government

Reduction of Input Reduction of Input Cost (Corn)Cost (Corn)

Research and devt. on feed Research and devt. on feed formulation and other feed formulation and other feed ingredient substituteingredient substitute

Regulatory environment for Regulatory environment for private hog raisers and importers private hog raisers and importers

Farm Efficiency Farm Efficiency EnhancementEnhancement

Investment on research & Investment on research & development/upgrading of development/upgrading of breeding stocks through genetic breeding stocks through genetic engineering and artificial engineering and artificial insemination to ensure insemination to ensure continuous supply of quality continuous supply of quality stocksstocks

Establishment of breeding Establishment of breeding farms/centers in support to farms/centers in support to backyard and small hog raisers backyard and small hog raisers to ensure availability and supply to ensure availability and supply of quality stocksof quality stocks

Sectoral Plan: Sectoral Plan: SwineSwine

ConcernConcern Private Sector InvestmentPrivate Sector Investment Priority Support Services Priority Support Services Needed from GovernmentNeeded from Government

Transport and Transport and Handling CostHandling Cost

Construction of market infrastructure Construction of market infrastructure and development of processing and development of processing facilitiesfacilities

Policy formulation on equal Policy formulation on equal treatment of livestock (hog) as a treatment of livestock (hog) as a prime agricultural commodityprime agricultural commodity

Information & Information & TechnologyTechnology

Access on data holdings and data Access on data holdings and data sharing among hog raisers and sharing among hog raisers and other stakeholdersother stakeholders

Provision of a reliable and Provision of a reliable and quality data/information quality data/information

Animal Health Animal Health Strict implementation of Biosecurity Strict implementation of Biosecurity measures to attain Disease-Free-measures to attain Disease-Free-Country and promotion of export Country and promotion of export productsproducts

Strict implementation of animal Strict implementation of animal quarantine rules and regulations quarantine rules and regulations to prevent and control spread of to prevent and control spread of diseasesdiseases

Sectoral PlanSectoral PlanSwineSwine

Government Support to Swine

Sector Plan

Access to financing for facilities and equipmentAccess to financing for facilities and equipment

Increase local feed productivityIncrease local feed productivity

Incentives for local manufacturersIncentives for local manufacturers

Strengthen anti-smuggling campaignStrengthen anti-smuggling campaign

Sound regulatory environment for integrators and importers Sound regulatory environment for integrators and importers

Access to reliable and quality information and dataAccess to reliable and quality information and data

Review MAV Rules/ Tariff RatesReview MAV Rules/ Tariff Rates

CORN IMPORTATION (2001 – 2010)

0

20000

40000

60000

80000

100000

120000

140000

Jan'05

Apr Jul Oct Jan'06

Apr Jul Oct Jan'07

Apr Jul Oct Jan'08

Apr Jul Oct Jan'09

Apr Jul Oct Jan'10

Apr Jul Oct

FEED WHEAT IMPORTATION (2001 – 2011)2005 2006 2007 2008 2009 2010 2011

INDUSTRY CHALLENGES

•Higher input costs

•Lack of test laboratory

•Climate change

•Over importations (e.g. Offals must have minimum access volume

•Negative media publicity regarding “bocha”

•Very low tariff rates for imported pork product

•Biosecurity measures not in place in all farms

INDUSTRY OPPORTUNITY

•Export possibility after FMD Certification