Pig prices remain static as producers likely to be hit with increased costs

Pig prices have continued to remain static in Ireland, as producers are likely to be hit with increased costs, according to the chair of the Irish Farmers’ Association’s (IFA’s) Pigs Committee, Tom Hogan.

As it stands, pig prices are sitting at around 140c/kg – with a few deals reportedly being agreed on prices that are marginally higher, Hogan explained.

He maintains that the cost of production facing Irish pig farmers is approximately 150c/kg. This means that producers are operating at a loss at current prices.

One of the greatest fears at the moment is the cost of feed increasing. Hogan outlined that an increase of between €10/t and €20/t is likely on compound feeds in the future.

An increase of €10/t on compound feed equates to an increase of about 4c/kg on the cost of production.

“Last year was quite good for pig prices; but you aren’t long forgetting the good times when you are in the midst of the bad times. We are four months into poor prices now,” he said.

Hogan added that many pig farmers are facing cash flow difficulties as a result of the prolonged spell of poor prices. Repair jobs and other work that needs to be carried out around the farm are being shelved because of this, he said.

Does Mexico hold the answer?

The chair of the IFA’s Pig Committee acknowledged that European markets aren’t very strong at the moment, but he was optimistic about the recent agreement on trade between the EU and Mexico.

He explained that Mexico had a deficit trade balance of 620,000t of pork and ham in 2016 and that the country will remain an important global importer of premium pig meat.

When the deal is finalised, it will see the immediate removal of 99% of tariffs imposed by Mexico on EU pigment – opening the door for Irish and EU exporters of pig meat to sell in another market, Hogan said.

“Mexico has significant demand for high-quality hams and this presents an opportunity for the Irish processing sector to increase their global customer base, which is so important to an exporting country such as Ireland – particularly while the potential Brexit time bomb is ticking away.

Irish pig farmers have produced pigs since mid-January at below the cost of production, and all cash reserves built up during a few good pig price months in summer 2017 are long depleted.

“Without a sustainable price for the farmer, there will be no pig industry left to applaud the opening of new market opportunities such as the Mexican market,” he concluded.