Hopes for pig price boost in the wake of US-China trade dispute

There are hopes that a pig price boost could be on the cards for Irish pig producers in the wake of growing tension between the US and China.

In recent days, China has decided to put in place retaliatory tariffs of up to 25% on US products; this followed a decision by the US to impose tariffs on aluminium and steel.

The Chinese government imposed a tariff of 15% on 120 different products, while the tariff will be increased to 25% on an additional eight products. It was decided that the 25% tariff would apply to pigmeat.

The chairman of the Irish Farmers’ Association’s (IFA’s) Pig Committee, Thomas Hogan, believes that these developments could prove positive for pig producers here.

It would have to be positive. A 25% tariff would have to make US pigmeat less competitive.

“We should see an increased demand in pigmeat from Europe and that should filter through here pretty quickly,” he said.

According to statistics from Bord Bia, the volume of Irish pigmeat exports increased by 3% – to 247,000t – in 2017. This brought the total value of exports to about €712 million, representing an increase of 14% in the total value of pigmeat exports last year compared to 2016.

Some 56% of these exports went to the UK, while 13% of Irish pigmeat exports went to China.

Irish pig prices

Hogan added that these recent developments should back up Irish pig producers’ calls in recent weeks for a “justified and warranted price increase”.

“We’ve had three full months of poor prices and bank balances are beginning to feel the pressure. We’re looking for an immediate increase of 10c/kg,” he said.

At the moment, the average pig price increase stands at 140c/kg; but, the IFA has indicated that the cost of production stands at 150c/kg.

‘Price volatility is a significant challenge’

Price volatility is a significant challenge for the pig sector, according to the Minister for Agriculture, Food and the Marine, Michael Creed.

The minister made the comment in response to a recent parliamentary question from Fianna Fail TD Brendan Smith. Developments over the last few years emphasise the cyclical nature of prices in the sector, Minister Creed added.

“Current prices – which stand at €138.7/100kg – are 16% below prices at the same time in 2017, which was an exceptional year for pig prices, but remain above price in the same period in 2016.

My department has made a concerted effort to support market diversification. The importance of this is illustrated by the significant expansion in Ireland’s pigmeat exports to east Asia, and to China in particular.

“The uncertainty surrounding Brexit lends an even greater importance to the expansion of access to international markets,” he said.

International markets

Minister Creed explained that he visited Mexico – now the fourth largest global importer of chilled and frozen pork – in June 2017. With Mexican demand continuing to grow, he has made access to that market a priority.

Commenting further, the minister said: “I also travelled to Japan and South Korea last autumn to promote the development of further opportunities for Irish producers in these markets as I want to continue to diversify the range of markets to which Ireland has access.

Exports to Japan more than doubled to €22 million in 2017, putting it in second place in international markets.

“We can reasonably expect that the new free trade agreement with Japan (JEEPA) will further enhance trade opportunities. Growth in the Philippines was also strong, up 54% – making it the third largest international market for Irish pigmeat exports,” he said.