Pig processors say they’re ‘fully cognisant’ of the difficulties faced by producers

Pig Processors are fully cognisant of the difficulties faced by Irish pig producers presently, according to Meat Industry Ireland (MII), the IBEC sector association representing pigmeat processors.

It says that processors have met recently with IFA representatives to discuss the market situation and will have a further meeting with the IFA next week.

According to MII there are a number of underlying factors which have resulted in the current challenges.

Market problems

It says the January 2014 technical embargo imposed by Russia was further exacerbated by the wider Russian embargo on EU and North American exports which was introduced in August 2014.

MII says as well as the direct impact of losing the market which accounted for a quarter of all EU pigmeat exports (750,000 – 800,000 tonnes), there has also been a further indirect impact as US and Canadian pigmeat exports, also banned from Russia, have been displaced onto other key international markets including Japan and the Philippines.

Combined with this significant reduction in export market availability (Russia previously accounted for 4% of EU production), there has been an EU wide increase in pig production of 6% resulting from extra pig numbers and increased carcase weights, according to MII.

It also cites an increase in US production as their herd recovers from PEDv.

This market imbalance is exacerbated further by the outflow of product from the earlier APS scheme at a time when stocks are already at very high levels, it says.

MII also noted this combination of lost international markets, increased EU production and existing APS product has led to the unusual circumstance whereby the normal positive uplift seen during the summer months in Europe did not materialise in 2015.

Pigmeat prices well ahead of EU average

Notwithstanding the current market difficulties, MII says it must be noted that Irish pigmeat prices have remained well ahead of EU averages over the past 12 months and in particular ahead of many of the major pig producing EU member states, particularly those that are similarly dependent on export markets.

MII welcomes the recent Agriculture Council confirmation that the EU Commission will re-engage in technical discussions with the Russian authorities to resolve the technical embargo which affects exports of some EU pigmeat.

It says a further APS scheme, while not generally a long-term solution, may help to alleviate the current situation slightly in the short-term however it is crucial that such a scheme does not lead to a situation whereby further release of product takes place early in 2016.