ChileCarne Talks wraps up series with key topic: “Transition to a group housing system for gestating sows: lessons from Brazil”

The final talk explored Brazil’s experience since the implementation of Regulatory Instruction No. 113/2020, which sets a 25-year timeline to complete the transition to group housing systems for gestating sows. This experience offers valuable insights for Chile, especially in adapting to new global animal welfare requirements for meat production without losing competitiveness.

ChileCarne concluded its first series of technical “ChileCarne Talks” focusing on a key topic for the meat exporting sector: The “transition to group housing systems for gestating sows: lessons from Brazil.” The talk  took place on December 5 at the trade association’s headquarters and was given by Dr. Osmar Dalla Costa, a renowned researcher from the Brazilian Agricultural Research Corporation (EMBRAPA).

Matías Andrade, ChileCarne’s Head of Innovation and Development Projects, who organized the Brazilian expert’s visit, stated: “Hearing about the experience of other countries, such as Brazil, in the transition to group pens for gestating sows, shows us the difficulties the process entails and the need for public-private collaboration to ensure that small and medium-sized producers are not forced out of the business because they cannot afford it. Such major changes must be implemented within the appropriate timeframes, guaranteeing that our country does not lose competitiveness and, above all, maintains food sovereignty.”

Dr. Dalla Costa shared Brazil’s experience with representatives from ChileCarne’s member companies, discussing the challenges of migrating from individual gestation crates to group pens.

What are the main challenges and difficulties of transitioning from gestation crates to group pens?

The main challenge is the cost of production. Another factor that slows down the process is the availability of capital and financial resources. In Brazil, the entire transition is moving slowly, and people have to adapt to this new reality.

The process started around 2014, driven by the private sector. The first company to announce the migration was Sadia, now known as BRF. They set a 12-year timeline to complete the transition. Back then, there was an expectation for the government to provide more financial support or subsidies to facilitate the change, but that did not happen.

Currently, companies operate under a pyramid system. Farrowing farms send piglets to a single rearing farm and then to a single finisher farm, avoiding mixing animals from different origins. Ten years ago, the average farm had between 400 and 500 sows. With this change, farms increased their size, reaching an average of 1,200 sows. This called for renovations and expansions, which required additional funding and translated into higher production costs.

For example, if the cost used to be $3 USD per kilo, after the migration it might have gone up to $5 USD. However, this increase was not passed on to the end consumer. The private sector absorbed the cost.

In recent years, Brazil’s pork industry has faced financial crises leading many producers to postpone new investments. In the last two or three years, some producers have simply not wanted to invest, waiting for better times.

These are the main problems seen in migrating the penning systems.

What is the motivation behind the transition?

In Brazil, between 80% and 90% of pig production is vertically integrated. This means that large companies determine production standards and producers must comply. If they do not, they risk being left out of the production chain.

This is not an entirely voluntary process. Companies set goals for 10, 15, or 20 years, and producers have to adapt to continue producing. For small independent producers, the transition is even more difficult, since they must cover the costs directly.

How could the government or public agencies support this transition?

The best way for the government to support would be to offer subsidized lines of credit. In an ideal world, this would significantly ease the process. However, in Brazil there is not much subsidized financing.

What the government and research institutions have done is organize seminars and technical conferences for producers and equipment manufacturers. These events share information on animal welfare and group systems, as well as challenges such as increased mortality or reduced pregnancy rates.

These initiatives have served to share knowledge and show the path that different actors are following. Government support has been more technical and educational than financial.

In terms of foreign trade, animal welfare is not yet a requirement for importing and exporting meat products. How do you think the situation will evolve?

Companies began investing in animal welfare not because it was interesting, but because large buyers such as McDonald’s or Carrefour demanded it. These clients started saying: “I will only buy if you comply with animal welfare principles.”

It all started with humane slaughter, then transport, and finally extended to the housing system. Although there might have been an initial price increase, I think that over time it will become so normal that, if you do not follow animal welfare practices, you will have more difficulties selling your products. I do not believe this will translate into higher prices paid to the producer but will only facilitate market access.

How is this sustained over time?

I do not have information on whether large buyers like McDonald’s pay more for products that follow animal welfare practices. That’s a trade secret.

What happens is that NGOs start mobilizing and companies invest because these organizations alert the financial markets. They say that companies that do not invest in animal welfare are not trustworthy for those who provide capital. This impacts the perception of the stock market and makes access to financing more difficult.

It is similar to what happened with car seat belts. At first, three-pointers were a novelty and more expensive, but today they are mandatory. Something similar is happening with animal welfare. Practices such as the use of gestation crates, tail docking, and branding are being replaced by more modern alternatives. For example, electronic tracking devices are being used, which may cost five cents more.

Over time, these practices will become the norm.

With this final talk, the first series of ChileCarne Talks came to an end. The event is promoted by the association to provide a space for updating knowledge and discuss key issues for the industry: antimicrobial resistance, sustainability, and animal welfare. This approach responds to the urgent need to move towards sustainable production systems aligned with the growing demands of international markets and consumers.