Thursday 29 September 2016

Viewpoint: Pig producers sliced and diced by market forces

Published 01/03/2016 | 02:30

An IFA protest is held outside of Kerry Foods in Shillelagh Co Wicklow, called on Irish firms not to use imported pigmeat. Photo: Finbarr O'Rourke.
An IFA protest is held outside of Kerry Foods in Shillelagh Co Wicklow, called on Irish firms not to use imported pigmeat. Photo: Finbarr O'Rourke.
There are less than 300 pig producers left in the country.

How serious is the situation in the pig industry?

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Last week the Kerry ham processing plant at Shillelagh in Wicklow became the proxy target for an IFA picket. The plant was singled out by frustrated producers on the back of a Bord Bia report for the last quarter of 2015 which showed that only 22pc of Galtee rashers have the Quality Assured logo, signifying Irish origin.

Kerry point out that they are forced to import meat to cope with varying requirements such as promotions, and that the absence of a Bord Bia Quality mark does not necessarily mean that the meat is imported.

But with just 50 people present at the protest, you could be forgiven for thinking that this is just another chapter in the well-known pig price cycle?

This has traditionally provided farmers with 18 months of good prices, followed by two years of mediocre returns, followed by 18 months of a loss-making period.

But talking to pig farmers young and old over recent days, it appears that the the usual 18-month uplift was reduced to a mere three-month lift in late 2014.

While a mass outbreak of disease in the US herd in recent years masked the impact of the closure of the Russian market, the rebound in US production has exposed Irish producers to the full impact of the supply imbalance that now exists in Europe.

Production may only be 3pc too high in the EU, but this small over-supply has left farmers in a situation where they are working harder and longer hours just to stay in business. Some said they just couldn't afford to take the day off to join the protest.

The lack of numbers and unity is costing pig farmers dearly.

With less than 300 pig farmers left in the country, every producer counts. But many feel neglected by the IFA, pointing to the fact that monies from EU crisis funds flowed into dairy farmer bank accounts first, despite the pig sector being on its knees for years.

They haven't succeeded in pulling together to form a strong co-operative movement, despite the golden opportunity that the launch of the Truly Irish brand presented in recent years.

Instead, it appears that this farmer initiative is going to end up in court, challenged by the many pig producers who feel they've been shut out of the operation. Meanwhile, the race to produce more piglets per sow, and increase average unit size continues.

While the average pig farm could survive in 2006 by producing about 120 pigs for slaughter per week, today the average is almost double that, and the 200-300 sow units are closing down or being contracted out.

Some argue that the sector should consolidate along similar lines to the poultry sector where the processor effectively controls the feed and birds, and contracts the farmer and their facilities to rear the 'crop'.

The upside is a guaranteed wage for the farmer, but is that really what these investors risked so much throughout the years to achieve?

Indo Farming

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