Why EU and Irish pig farmers need help urgently

It’s a long hard summer for pig farmers.

Why EU and Irish pig farmers need help urgently

By Stephen Cadogan

It’s a long hard summer for pig farmers.

In mid-June, the Polish agriculture minister briefed the EU Council on the difficult situation in the pig meat market and asked the Commission to improve the situation, with measures such as private storage aid for pig meat, financial support for farmers, and opening of new markets.

But the Commission considered it premature to introduce market management measures, saying it would continue to closely monitor the market.

There wasn’t much mention of pigs at the next EU agriculture meeting in July, with drought rearing its head as the major threat to EU agriculture, and of course, nothing much happens in EU in August.

Ironically, pigs in their piggeries are probably the least profitable livestock across the EU now, even though the other livestock are running short of grass in the fields.

The grain crops across Northern Europe have also been withering in the heat wave, and that will deepen problems for pig farmers by raising the cost of feed.

How bad are things for pig farmers now?

Michael McKeon of Teagasc revealed recently that the profit margin for pig farms that Teagasc monitors is at its lowest level for about 15 years, and pig farmers are having severe financial problems at the moment.

In July 2017, the average pig price was 172c/kg and the margin over feed was 69c/kg, the highest since 2006. But the July 2018 pig price is 138c and the feed cost is 108c/kg, leaving a 43% margin of 30c/kg, before other production costs are included.

The high price and profit last year stimulated a 3% sow increase in pigmeat across the EU, which put pressure on pig prices, but the bigger issue is the slow-down in Chinese pigmeat imports, reduced 20% compared to 2016.

Meanwhile, the falling pig price coincided with wheat and barley harvest problems across Europe and Russia, heralding higher pig feed costs.

Pig farmers are somewhat used to the “pork cycle” of fluctuations in supply and prices, a recognised economic pattern in livestock markets for 100 years.

Hopefully the Chinese will increase pigmeat imports, or the EU will introduce relief measures, before pig farmers go out of business in this slump in the pork cycle.

As our most efficient farmers, they deserve a break.

In Ireland, the quantity of pig meat produced per sow per year has increased by 21% since 2011, according to the Teagasc e-Profit Monitoring (ePM) pig herd recording system.

Farmers have performed well, to keep Irish pigmeat competitive on the export markets.

But they have not been rewarded, instead they were paid the fifth or sixth lowest carcase prices for pigs, out of 26 EU member states, this year.

They have been struggling for seven months of loss-making prices, and pigmeat processors here are still cutting what they pay for pigs.

And farmers here pay more for pig feed than most European counterparts.

At EU level, pig farmers need looking after, not least because of the external animal health threat of African swine fever (ASF) continuing to spread from the east.

It could devastate EU exports and drastically upset a current very fragile market balance.

It’s a real threat, with ASF established in the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Romania. Hungary reported its first ASF case in its wild boar population in April, and incidence is rising in Romania, with both situated next door to Ukraine, where the disease is out of control.

ASF does not affect humans or other species but is a devastating infectious disease of pigs, usually deadly, with no vaccine available.

If it gets into intensive EU pig farm areas, control will require slaughtering of all pigs.

Export bans would apply to the affected areas.

Already weakened by low profitability, the EU pig industry could be set back decades if ASF advances across Europe.

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