Pig farmers warn of gaps on shelves as producers start to cut back numbers

Teagasc forecasts the average size 600-sow unit will lose over €430,000 this year.

Crippled Irish pig farmers say they are already scaling back production and say gaps appear on shelves if producers are not paid the prices they urgently need to stay afloat.

The industry is on its knees in Ireland as higher input costs have become the straw that broke the camel’s back coming on the back of several successive challenges — first of all, market loss due to Brexit, then the CO2 shortage, African swine fever challenges and Covid-linked plant closures to name a few.

Many pig farmers have fallen several months behind with their meal bills, using overdrafts to literally keep the lights on as input prices soar.

Speaking to the Irish Examiner, pig farmers at the Irish Pig Health Society conference this week in Portlaoise said the situation facing the industry was the most dire in living memory.

Nearly all spoken to said either they or others they knew of in the industry had scaled back production, with some suggesting Irish pig numbers could already be down as much as 15%.

Some like Maurice O’Brien, who farms in Mitchelstown, Co Cork, are trying new things to reduce their exposure.

Mr O’Brien said that for the first time ever he had decided to grow some cereal crops, with the help of a local tillage farmer. He planted wheat three weeks ago, but says it was difficult to find land which was suitable.

“What we have planted will only feed our pigs for a few days, so it is only the drop of milk in the tea, but we hope it will help in some way,” he said.

“Because we’ve never done it before and the land isn’t great, we might not get great yields but if you have a chance to grow a little, it’s a good time to try, so that was why we decided to give it a go. We are all feeling the pain in the industry.”

Tom Hogan, a former IFA pigs committee chairman, has been a pig farmer for 30 years with between 450 and 500 sows on the farm in Anglesborough, Co Limerick.

This is the worst he has experienced in his lifetime in the industry.

“It’s exceptional times,” he said. “I have never seen anything like it before. The price of feed has totally eroded all margins. I’d estimate up to 20% of Irish pig farmers are really in extreme pressure.

“A lot of are going out of the industry and more are cutting back. Only the lucky ones will be able to get through this unless more is done.”

Patrick O’Keeffe, who keeps around 1,900 sows on his Mitchelstown farm, said bodies like Bord Bia needed to do more to promote Irish pork in its hour of need.

He warned gaps could soon appear on shelves as pig numbers fall.

“The cost of food has to rise dramatically,” he said. “The price of feed is hoovering up any margin there is and it is difficult for every single one of us.

“Retailers will have empty spaces on shelves if they don’t pay producers what they need to break even. Nine months is the life cycle of a pig. Eight to ten weeks for broilers - that’s how long it will take supplies to fall when producers quit or scale back.

“Retailers know that farmers have reduced numbers in the last two quarters.”

Stagnant prices

Teagasc forecasts the average size 600-sow unit will lose over €430,000 this year.

Prices for pigs have remained stagnant locally, again ranging from €1.66/kg to €1.76/kg this week, according to the latest Irish Farmers Association pig meat market report.

Throughput for the week ending April 24 was 62,145 - a lower figure due to the Easter bank holiday.

“Farmers need significantly more upward movement in the price they are paid for their pigs urgently to slow the haemorrhaging of money they have endured to date,” a spokesperson for the association said.

“Even with markets showing signs of recovery, and pig price moving slowly in the right direction, the increase required to reach break-even is far too large and slow for farmers to secure cash flow.

“This is completely unsustainable. Margins haven’t been recovered by the marketplace and this is concerning.”

It’s not helped that prices here appear to be lagging behind other countries. Ireland’s percentage of the EU price is currently 84% of the EU average price.

The European market is continuing to improve with pigmeat prices moving upward, with around €1.90c/kg paid for Grade E carcass. According to the European Commission report, it’s 21.2% higher than this time last year.

The UK price also had a further significant increase and now sitting at around €2.10/kg.

Agriculture minister Charlie McConalogue announced earlier this month that Government approved a €13m EU exceptional aid package to support commercial pig farmers.

Under this, farmers will be eligible for a maximum payment of €70,000 per enterprise.

However, lobby bodies warn packages announced will only cover losses for April and May.

The Irish Farmers’ Association said it went to Government “looking for an aid package to support us for the year” and what has been put on the table so far is “a long way off the mark”, according to IFA pig committee vice-chairman William Murphy.

During the conference, Dr Rory Deverell, a commodity trading advisor at StoneX, explained the merits of forward purchasing or insuring purchases of feed on commodity markets, explaining that processors, mills and farms can insure both against prices rising and falling.

It’s too late for this year. For many farmers such instruments remain too obscure to become a serious consideration, fearing getting locked in at the top of the market or that soya prices could now fall dramatically.

Tuesday’s conference explored the latest research and innovative ideas to improve animal health and welfare but with prices where they are, and producers struggling to pay for the essentials it’s hard to see how many can have the appetite to invest in welfare upgrades now.