Cereal prices putting pig farmers under pressure
The industry supports more than 7,000 jobs in farming, milling, processing and ancillary services, especially in leading pig production counties like Cavan and Cork.
But the few hundred farmers who keep it going have been under pressure since the summer 2009 increase in cereal prices, because cereals account for 70% of pig feed.
More expensive feeding has affected the industry across the EU, and an EU Aid to Private Storage Scheme was introduced last year to put a floor under pigmeat prices. This, and the release of intervention cereal stocks, improved the situation temporarily.
But there is also pressure from the EU’s new loose sow housing welfare requirements. In Ireland, 40% grant-aid totalling €13m is available to help pig farmers comply with sow welfare requirements, following earlier schemes in 2005 and 2007 which made payments of €6.2m to 63 applicants.
The industry is highly dependent on affordable credit, a situation which has become more challenging due to Irish banking difficulties.
Matters have not been helped by the public service recruitment embargo and budgetary constraints hitting the Teagasc advisory and research service.
Pig farmers have offered to fund and develop a joint programme that will enable Teagasc hire three advisers and one researcher. Government sanction is now being sought for this.
Representing the sector is IFA National Pigs and Pigmeat Committee chairman Tim Cullinan, a pig farmer from near Nenagh, Co Tipperary.
A. The increased cost of feed is putting farmers under enormous pressure. Because of the credit crunch, farmers are finding it extremely difficult to source the finance to cover the cost. The problems are compounded by the refusal of retailers to contribute to the cost of new welfare legislation. This is absolutely astounding when you consider that pig farmers have come through two years with no profit margin. If retailers want meat produced to the highest standards, the costs must be shared by them. In late 2011, an agreement was reached between the EPA and IFA over transfer of pig manure to customer farmers. This helped alleviate the red tape.
A. I am not aware of any exports at the moment, but it is being actively pursued. As the price gap has widened considerably between Irish pig prices and pig prices on the continent, this has become a viable option.
A. Because of the low pig price and extremely high feed cost, credit difficulties are immense. The credit requirement varies from farm to farm.
A. Most pig farmers do. Despite this, it is extremely difficult to satisfy banks at the moment and to get a decision out of them. The cases made to banks must be looked at favourably, as the farms can achieve viability if a restructuring plan for all existing debt is put in place.
A. With Teagasc, we have contacted farmers and encouraged them to get in touch with the Credit Review Office if they are having difficulties getting credit. If a bank doesn’t give a decision within 21 days, farmers should contact the Credit Review Office.
A. At the moment, Ireland would be at 92% of the EU price. Pigmeat rose to over €2 per kilo in China. Prices have also risen significantly in the US, from $40 cwt to $80 cwt in the recent past.
A. Farmgate production grew almost 10% last year. It was crucial that exports grew at this level to ensure that the surplus meat was removed from the home market.
A. Pigmeat retails at about €6.80 per kilo. The farm gate price is €1.50 per kilo. There is absolutely no transparency along the food chain between farmers, processors and retailers. This is something the Government needs to look into if they want to achieve the growth targets set out in Food Harvest 2020.
A. Bord Bia are currently looking at a quality assurance scheme for free range pigs. Because of our climatic conditions I wouldn’t envisage further expansion in this sector.
