Fear and loathing in pig meat
The industry must focus on the needs of its customers, and tackle issues such as competitiveness, quality and consistency of product, and traceability.
To do so, farmers and processors must pull together.
Unfortunately, there has always been distrust, not just between farmers and primary processors, but also between primary and secondary processors.
Now, the gap between farmers and processors is wider than ever. Enterprise Ireland, in 2001, expressed the hope that a unified approach to the development of the industry would stem from the section of primary processing (more than half) controlled by farmers’ co-ops.
Instead, the opposite has happened, with pig farmers and Dairygold Co-op, which controlled 20% of the pig sector, at loggerheads. This is a world away from the seamlessly integrated pig-meat industries of rival countries, where there are supply agreements between farmers and slaughter plants for 70% to 80% of pig production, and these are vital to success.
Such arrangements are needed for the traceability and production-to-specification demanded by the retail trade.
Here, Dairygold Co-op say they will work with pig producers to ensure the smooth transition of pig slaughter throughput to other plants.
Glanbia has confirmed that it has capacity to process the Dairygold supply.
With benefits on both sides, surely the two co-ops could have arranged a smoother transfer; instead, farmers have been enraged by an unexpected Dairygold announcement.
It’s not too late for them to smooth the troubled waters before the Dairygold plant closures scheduled for the end of October.
It’s imperative for them to do so, because the industry needs more than the higher-capacity slaughter plants, improved efficiency, and reduced processing costs which chief executive Jerry Henchy said will follow the Dairygold decision.
Crucially, the industry needs a guaranteed supply of high quality Irish pigs. Ideally, it should fill 95% of processing capacity, if competitors’ low production costs are to be matched.
That requires equitable supply agreements from farm to plant, side by side with rationalisation of surplus processing capacity.
Only then can an integrated industry fully satisfy consumer requirements, and hope to live with competitors like Smithfield, which has annual sales of $7.5 billion in its North American home market, and which is building up its EU base in Poland, France, Spain and the UK.
With competition like that, European processors need to get their act together fast.
Otherwise, Dairygold’s slaughtering operations will not be the only closure, and there will be more shock announcements, with accompanying uncertainty and upheaval.
Behind the announcements, farmers too will be quietly getting out of pigs.
Many of them are heavily indebted after a 1998/99 price slump, EPA compliance, and animal welfare costs.
Dairygold closures will only help the industry if the farmers who produce the 10,000 pigs per week slaughtered by Galtee are encouraged to stay in pig production.
