Cross-Border competition drives pig prices to €1.90/kg
Returns more than €40/hd up on 2018, but still lag behind NI and Europe, claim producers
Stiff competition between Northern Irish factories and those in the South has pushed pig prices to 188-190c/kg this week.
Although factories are continuing to quote 184-186c/kg for pigs, the indications are that up to 4c/kg extra is being paid by some Northern plants to secure supplies.
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"While farmers report no change in official pig quotes this week, 2-4c/kg above official quotes were reported," said Tom Hogan, IFA pig chairman.
Mr Hogan called on all plants to officially increase their pig prices by 4c/kg from this Friday.
The heightened demand for pigs from Irish factories follows confirmation that African Swine Fever (ASF) has spread to every province in China and has resulted in a 40-50pc reduction in the country's sow herd. This equates to around 12-14m animals.
Rabobank estimates that China's sow herd, which formerly stood at 30m, could fall by 55pc by year's end as a consequence of the spread of ASF.
The cull of infected animals means that China's pork production this year is expected to fall by one-third from the 54m tonnes produced in 2018. This represents a drop of around 18m tonnes.
Peter Duggan of Bord Bia said total Chinese pork output is forecast to drop 45pc in 2020, to around 30m tonnes. This will result in a deficit of 24m tonnes.
The shortfall in Chinese domestic production will be offset by imports of pork and other meat such as beef and poultry. However, the volumes required have pushed pork prices to record levels.
In China pig prices have hit almost €4.80/kg.
With the US and Canada excluded from supplying the Chinese market due to the ongoing trade war and political difficulties, there is increased demand for European and South American pigmeat.
Whereas in the past Irish pigmeat exports to China were primarily pigs' heads and other fifth quarter product, as well as belly pork and fore-legs, the market is now taking quality cuts such as hams.
This trade has helped underpin the recent lift in pig prices. However, although pig prices have improved by 45c/kg or more than €40/hd compared to this time last year, farmers point out that units are currently paying down huge feed bills and other debts incurred over the last two years.
Mallow pig producer, Tom Sherman, said some farmers were using the current lift in prices to clear debts and will exit the sector once this is done.
"A lot of fellows have six to eight months credit built up with feed providers. They are getting out once their business is in the clear," Mr Sherman said
The Cork farmer asked why the prices paid by Irish pig processors invariably lagged those available in Northern Ireland and Europe.
Mr Sherman said processors invariably claimed they were simply following the market every time they cut prices. He asked why they weren't as quick to follow the market when prices were improving.