€3,000 EU support fund cheque won’t stretch very far for Irish pig farmers
It delivers a flat rate payment of about €3,000 to each farmer.
This will issue to all pig farmers who supplied 200 or more pigs for slaughter in 2015.
Further details will be sent to pig herdowners in the coming days.
However, pig farmers fear that the EU is taking away with one hand what the EU and government give out with the other hand, by suspending the EU Private Storage scheme.
Private storage is the key to recovery of the EU pig market, experts believe re-opening it will be critical for market support.
The €3,000 won’t stretch very far for Irish pig farmers.
In 2014, they recovered to a profitable position after a number of years of low or negative profitability.
But the reprieve was shortlived, the profit margin declined in December 2014, and remained at a low level throughout 2015.
Feed prices dropped 4.5% last year, but that gain was were more than cancelled out by the severe 11% drop in pig price, which resulted in significant losses for many Irish pig farmers (totalling more than €36 million in 2015, according to a Teagasc estimate).
The current pig farm profit margin over feed of 37 cent per kg of deadweight is the lowest since 1999.
The EU market has been hit by the Russian ban on imports since February 2014.
And EU pig price declines accelerated from last September, due mainly to increased EU supply, and a rebound of US pig production after their PEDv disease outbreak in 2014.
In the first week of the New Year, the EU stepped in to arrest the market decline, opening the private storage aid scheme it had proposed in September, funding removal of certain pigmeat products from the market for up to five months.
The scheme was very successful, taking 90,000 tonnes of product off the market in three weeks, about 4.5% of the EU monthly production (a similar scheme from March to April in 2015 had stored only 67,000t).
Initial analysis showed the decline in pig prices seen in the end of 2015 had been halted, and there were indications of a modest recovery in prices.
With EU Commissioner Phil Hogan telling MEPs the markets for both dairy and pigmeat commodities were in “a very serious situation“, and he would consider extending dairy and pigmeat storage schemes “if I can match the money to do that”, it came as a surprise when member states suddenly voted to pull the plug after three weeks, responding to EU Commission advice.
Countries to vote against ending the scheme were Denmark, Estonia, Ireland, France, Hungary, Croatia, Austria, Poland, Portugal, and Romania.
But the UK, Belgium, Czech Republic, Germany, Greece, Spain, Italy, Cyprus, Lithuania, Luxembourg, Malta, Netherlands, Slovakia, Finland, and Sweden swung the verdict in favour of termination.
The scheme cost €27.6 million, just to hold supply off the market until later this year.
But now that it is gone, pig prices are expected to decline, in line with unfavourable 2016 prospects for the global pork market.
The abrupt termination of the pigmeat private storage aid scheme took the industry by surprise, and was harder for some in the pig business to swallow when they saw a similar scheme for butter and skim milk powder being extended to September 30, even as the pigmeat scheme was dropped.
However, the take-home message for all farmers is that the EU can’t be relied on very much to rescue farmers from market slumps.
Both pigmeat and dairy markets are depressed around the world. At least, there are hopes of dairy markets recovering in the second half of this year, but most market analysts believe pig farmers are now left depending on a disease outbreak in Europe to reduce supplies.
