North needs road map for pigs – PCM
The management of a leading pig development organisation has stressed the absolute necessity for all relevant stakeholder groups within the North’s pig industry to agree a road map, which will lead to the development of a sustainable future for the sector.
Hugh McReynolds, CEO of PCM (Preferred Capital Management) Ltd has told AgriLand that the potential now exists to place an extra 15,000 sows on Northern Irish farms in the run up to 2020.
“We have ‘talked the talk’ but now we need to deliver – not just go around in circles and fail to commit to one another. I firmly believe that processors need to show leadership and break this cycle of inactivity, if they want to maintain or grow the business decisive moves by the processors will ‘goad’ the industry to much needed action and deliver growth.”
Mr McReynolds continued: “The commercial banks and Invest NI need to agree a funding model with the pig industry which meets the needs and requirements of the present day situation. This is sadly lacking as we speak. There are some forward thinking pig farmers being held back by lack of access to finance and a commitment by processors.
“A vibrant pig sector requires both the combination of new efficient high health breeding sites together with contract finishers, and, proper investment in our existing farms.
“Retailers will only support the pig farmer if we demonstrate our professionalism and production efficiency. The present market price gap between UK and EU pig prices is a huge challenge for Processors selling into the retail market, The ‘horsegate’ situation leading to a demand advantage is now ‘so last year’ and holds little or no commitment now by Retailers in their sourcing policy.
“If Northern Ireland’s Pig Industry is to survive and prosper, then we need all stakeholders to play their part to facilitate change and growth. I would particularly highlight planners, the environmental agency and especially the local council environmental health departments. We need these service suppliers to deal with planning applications in a time efficient and reasonable manner.”
The PCM representative went on to point out that processors need to commit to suppliers and enable them to invest wisely in a medium term plan to improve efficiency. In addition, farmers need to increase sow numbers to achieve a critical farm or operational size.
The conflict can sometimes arise as the processor runs the business on a weekly Profit and Loss with Capital Expenditure decisions based on a three-year maximum payback,” Hugh McReynolds stressed.
“The pig farmer has a longer timeframe in mind and will have struggled to achieve a seven-year payback. A 15-year financial plan would be more appropriate. In fact Denmark farmers pay back loans over 20 years, which is essentially a loan-type arrangement. Processors need to reflect a large element of the true cost of production in any contract.”