Pig processors accused of withholding price increases from farmers
Processors have been accused of ignoring the plight of struggling pig farmers by failing to pass on the full benefit of market improvements in recent price increases.
Although pig prices have lifted by 4c/kg over the last week, the IFA claimed that price hikes of at least 10c/kg were justified following confirmation of significantly tighter global pork supplies due to continuing disease troubles in China.
Pig prices have improved to a base of €1.51-1.54/kg, but the IFA claimed that processors will have to move to a base of €1.60/kg to reflect current market returns.
Pig production in China – which is the world’s largest producer and consumer of pigmeat – is forecast to contract a third this year due to an epidemic of African Swine Flu (ASF) which has infected up to 200 million animals. Rabobank estimates that this ASF outbreak will cut Chinese production by close to 40 million tonnes and result in a serious shortfall in the country’s overall meat supplies.
IFA pigs chairman Tom Hogan said the expected shortage of supplies in China had already been reflected in improved prices across Europe.
“Demand from Chinese buyers has been strong in recent weeks, due to a shortage of domestic pork production,” Mr Hogan said. “Across the EU there have been dramatic price increases since January. Countries with a similar producing and export profile to Ireland have experienced price increases of 25-30pc,” he added.
Although Irish prices have increased by around 16c/kg since March, returns to farmers are still well below those available across the EU, Mr Hogan said.
The IFA representative pointed out that the German pig price has increased from a low of €1.36c/kg in January to €1.73ckg at the moment. Meanwhile, €1.60/kg is being paid in Spain.
Mr Hogan said it was imperative that processors supported pig farmers by immediately reflecting market improvements by increasing pig prices.
“Pig farmers are battered and bruised financially and mentally. They need to see the benefits of the improved market conditions immediately to begin the process of repaying the massive debt levels that has accumulated over the past 14 months,” he explained
“Low pig prices, combined with rising feed costs in 2018 resulted in the lowest margin in the last 20 years.”
Mallow pig farmer Tom Sherman said the recent lift in prices had “come too late” for some producers.
He said meal bills and other debts had spiralled over the last 18 months as farmers tried to ride out the downturn. He said producers will require a base price of €1.80/kg for two years to balance the losses incurred since 2017.