The Irish pig sector is expected to return to “moderate profitability” in 2023 following a brutal 12 months during which the average pig farm suffered losses in the region of €422,000, according to Teagasc.
In its 2023 Economic Outlook for Irish Agriculture report, Teagasc anticipates that although pig production will fall slightly next year prices will continue to improve.
It has forecast a 22% increase in prices in 2023 which it said ” would restore profitability in the sector to a more normal level”.
Pig prices rose in 2022 to reach an average of 182c/kg, but pig production costs soared by up to 30%.
Teagasc has warned that prospects for Irish prices next year are likely to be driven by two key factors: Chinese pigmeat demand and European Union (EU) pigmeat supply.
According to its latest outlook report, China currently requires “significant” pigmeat imports but details that it may be difficult to predict how long this demand will last.
“A modest increase in Chinese demand in 2023, in an already tightening pig market supply will lead to upward EU pig price pressure.
“The other major influence on the pig price is the level of EU pig production,” Teagasc outlined.
It has forecast that live pig exports from Ireland will dip by 2% on 2022 numbers to 394,000 next year.
Pig production
In the outlook report Teagasc also looked at specific levels of production in various countries including Spain – where indications are that the rate of expansion of the sow herd in 2023 will be lower than in previous years.
In the other main EU pig producers (Germany, the Netherlands, France, Poland, UK) a forecasted sow herd decrease will also result in a lower supply of pigmeat on the EU market.
Teagasc has indicated that this reduced supply will continue to support prices throughout 2023 and into 2024.
But it has also advised that supply in Ireland has begun to decline, with forecasts indicating that it could decrease at a rate of between 5,000-6,000 pigs/week by mid-2023 when compared to 2022.
Teagasc expects the sow population next year to be roughly 133,000 head, which is unchanged on the 2022 numbers.
But slaughter levels will fall by 5% on 2022 figures to 3.65 million head, it said.
According to Teagasc, a combination of reduced EU supply and increased Chinese demand will be felt in the market from March or April 2023 onwards.
“Therefore the EU and Irish pig price should see a steady rise in quarter two of 2023 to reach a plateau by midsummer, with a further moderate increase in quarter three,” the outlook report highlights.
Last year the industry in Ireland was hit by higher feed ingredient prices, lower international pigmeat demand and the impact of the war in Ukraine.
But Teagasc anticipates that the overall outlook for 2023 for the Irish pig sector is for “modest profitability, with margins improving as the year progresses”.