If current pig prices and costs of production persist to the new year, the accumulated losses on the average pig farm will have reached “well over €400,000”, the Irish Farmers’ Association (IFA) Pigs Committee chairperson, Roy Gallie, has warned.
Speaking at the Teagasc Pig Conference which took place on Tuesday (October 18) at the Hotel Kilmore, Cavan, and Wednesday (October 19) at Horse and Jockey, Co. Tipperary, Gallie also added that this figure is after the Pig Exceptional Payment Scheme (PEPS) of €120,000 has been made to farmers.
The IFA Pigs Committee chairperson explained that farmers are currently making a loss of between 10-20c/kg of pigmeat produced, or a loss of €10-20/pig.
Gallie told pig farmers attending the conference that the IFA is currently meeting with processors and retailers and said “the news I have so far is not great, for the short-term at least”.
“Unlike the egg, for which we held a successful protest a few weeks ago for a price increase, the pig has to battle with imports from continental Europe,” he said.
“Just like the fact imported grain sets the price for grain here, so too does the pigmeat.”
Using approximate figures, Gallie explained the pigmeat export/import situation to farmers.
“In very simple math, we produce four million pigs here. The pork from 1.6 million pigs is used here at home, but we have to export 2.4 million pigs (pork equivalent).
“We then import 800,000 pigs into the country and it is the price of those imports coming into the country here that governs the price we’re paid in this country. That’s a very simplified view but one we must understand.
“Europe currently is 120% self-sufficient in pigmeat so third-country exports such as China, come into play for countries not excluded by their African Swine Fever (ASF) status.”
Gallie reminded pig farmers that “Spain exported large volumes to China while Germany, with ASF, filled the gap”.
The IFA pigs chair continued: “Creating a marketing label here (in Ireland) for the domestic demand is the only tool we have to override the ‘cheapest in the door’ pigmeat.”
Gallie outlined the importance of the Bord Bia Quality Assurance scheme and the DNA testing which he added was “championed by IFA president Tim Cullinan”.
He said the DNA testing “is the only tool we have to police the sourcing of Irish meat for Bord Bia Quality Assured products”.
Pig scarcity
Commenting on where potential further price increases may come from, Gallie said: “Scarcity of pigmeat is the only sure way we can fuel an increase in price that is currently needed for pigs to the order of between 40-60c/kg from €2.10/kg (where prices currently are) to €2.50/kg and €2.70/kg and beyond.”
Costs
Commenting on costs for pig farmers, Gallie said that the cost of feed is “likely to be the same well into the new year”. He also said there is a possibility that it will increase in price.
“Energy, labour and finance are all looking like increasing more in cost,” he added.
Gallie encouraged pig farmers to work out their cash flows.
“Be realistic and set your alarms,” he said.
“We are in completely uncharted waters and unfamiliar territory. We are at record levels but must go further and add to the retail inflation that every consumer is facing in this country enduring at 12.5% at the moment.”
Optimism
On a more positive note, Gallie said: “To get the €120,000 PEPS money and a record price of €2.10/kg, where we are today, is a phenomenal achievement for 12 months’ work and is no small thanks to you (the farmers) all for helping us get this.
“We have been out 15 times demonstrating to try and get some sanity and to try and get money back into farmers’ pockets,” he said.