Cormac McKervey of Ulster Bank has confirmed that pig prices in Northern Ireland are now exceeding farmers’ full cost of production.
“Pig farmers have been under severe financial pressure over the past 18 months, but two factors are now combining to significantly improve the margins generated within these businesses,” he said.
“These are an increase in the market price of pigs and a reduction in feed costs.
“Given these circumstances, the potential for pig producers to make considerable debt repayments in a relatively short period of time is significant.”
McKervey does not think that large numbers of pig producers will leave the industry, once they re-balance their books.
“Pig farmers across Northern Ireland are very efficient and are fully aware of the fact that markets can fluctuate,” he said.
“They are also very professional in outlook and take a long-term perspective, when it comes to managing their businesses.”
Ulster Bank at Balmoral 2023
The Ulster Bank representative attended the first day of Balmoral Show 2023 today.
He said he welcomed the opportunity to meet farmers from all sectors over the four days of the event.
McKervey explained that he is aware of the pressure that has come on milk prices since the turn of the year. However, international dairy markets have been coming under some pressure.
“But the basic fundamentals of dairy production remain sound. Ulster Bank remains available to support individual producers, if and when required,” he said.
“Beef prices remain exceptionally high. Yes, there has been a slip in hogget prices over recent weeks, but the general prospects for sheep remain strong.
“The poultry industry continues to perform well with free-range egg producers receiving good farmgate prices at the present time and thankfully, the feed tracker has insulated them from the spike in feed costs,” he added.
Input costs
According to McKervey, farmers are getting acclimatised to the very strong input costs that have characterised all the commodity markets for the past 12 months and more.
Where climate change is concerned, Cormac McKervey believes that farmers should start to carbon audit their businesses now.
“One very obvious indicator of this is the fact that merchant credit has not increased significantly despite the massive increase in feed and fertiliser costs,” he said.
“However, the issue of climate change will have no bearing on how the banks deal with their farming customers at the present time,” he stated.
“Carbon audits and starting the journey to lower emissions is not something to be afraid of. Northern Ireland has a good story to tell and the sooner farmers start the journey, the better.”