Unity crucial for pork industry to flourish
Published 22/06/2010 | 05:00
Pork farmers in Ireland have had a horrendous time over the past two years. With returns remaining depressed for long periods, producers are angry that price stability has not been delivered by Irish processors.
Following many years of serious investment in production units and operating standards, the majority of pork farmers in Ireland are highly geared. And in a business where margins are extremely tight, all options need to be considered in times of crisis.
With many members of the North South Pig Company under financial pressure and operating below break-even point, the company decided to examine the opportunity of developing strong working relationships with British factories.
There are major frustrations among pork farmers. A bleak outlook for their individual businesses meant that many felt there was no future for the sector. This resulted in some closing down their units.
Fortunately, the traditional system of selling directly to the local factory is no longer the only outlet open to producers. But is exporting a proportion of our live pigs the only way forward?
The price differential between what the English and Irish factories pay for pigs is substantial. This makes the option of exporting a very attractive proposition. One of the main reasons for the establishment of the North South group was to offer protection to all of its members and to support them in finding new ways to market pork in Ireland. However, it has become essential that this is also done abroad.
At farm level, there is €500-700m invested, while at factory level there is just above €30m. The irony is that while the farmers bear all of the risk and the financial exposure, they are being brought to their knees by processors who do not have such high gearing.