January 12, 2011

 

Higher feed costs cripple Irish pig farmers

 

 

Ireland's rising feed costs and inadequate factory prices are costing pig farmers a staggering EUR900,000 (US$1.17 million) weekly.

 

Up to 15,000 sows could be lost from the national pig herd in the coming months as pig farmers struggle to survive, industry experts have warned. This would equate to a 10pc cut in the national sow herd.

 

Pig farmers were hit with a EUR25/tonne (US$32.53) increase in the cost of feed from January 1, with a further EUR10-15/tonne (US$13-$19.52) rise being mooted for March.

 

IFA pig chairman Tim Cullinan said pig farmers were losing EUR15 (US$19.52) on every pig produced at the moment.

 

"We are being paid 138c/kg on an 80kg pig sow receive EUR110 (US$143.14) per pig. But feed costs EUR90 (US$117.11) per pig and other costs, such as labour, amount to EUR35 (US$45.54) per pig, bringing the cost per pig to EUR125 (US$162.65),"he said.

 

Mr Cullinan pointed out that Irish producers have the highest feed costs in Europe but pig prices here are at only 92-93pc of average European returns.

 

He insisted that higher factory prices were essential to the survival of pig units and accused processors of allowing the premium for Irish pigmeat to slip away.

 

"The IFA secured agreements with Tesco and SuperValu to pay 12c/kg and 10c/kg extra on Irish pigmeat purchases in December," he said. "If a group of farmers can do that, why couldn't the factories have done it?"

 

However, the pig chairman admitted that the solution to the current pig crisis would involve more than just the processors.

 

"We need retailers, processors, millers, farmers and banks all working together," he said, adding Government intervention was also needed.

 

Teagasc pig specialist Michael Martin describedthe rise in feed costs as crippling.

 

"The price of a composite pig feed has risen from EUR233/tonne (US$303.19) in the first half of last year to EUR304/t now and it could rise to EUR315-320/tonne (US$409.89-$416.40) by March," said the Teagasc expert. Mr Martin described the situation as a repeat of the 2007/2008 crisis exceptthat credit availabilityhad made matters worse.

 

"Back then the farmer could go to the bank for some money to tide him over but he can't do that today," Mr Martin said.

 

Cormac Healy from the Irish Association of Pigmeat Processors said that today's pig price of 138c/kg was is in fact 12c/kg ahead of the price paid this time last year.

 

However, he accepted that this still left some producers in a loss-making position given their higher production costs. Mr Healy said a price improvement would have to come from the home market and called for Irish retailers to support Irish pigmeat.