August 8, 2012

 

 

Due to prolonged dry weather in America, bringing home the bacon could cost shoppers up to 20% more this autumn.

 

Pig farmers have warned that soaring world feed prices due to drought in the US have sent the costs of producing pork rocketing. And new animal welfare measures are predicted to also impact on prices.

 

Consumers have been shielded from soaring pork production costs so far because of supermarket discounting, but it's "inevitable" that prices in the shops will rise in the coming months, experts say.

 

Drought in the US bread basket had led to 40% of the corn crop being lost in Iowa. Wheat yields were also considerably down and soy prices were at an all-time high.

 

Irish pig farmers buy huge quantities of imported feed, meaning they're hugely impacted when US and world prices rise. Prices for home-grown cereals are also soaring due to our terrible summer.

 

Cavan pig farmer Michael Maguire said his feed costs had risen from EUR290 (US$360) a tonne in January to EUR360 (US$446) now.

 

"We are selling below cost at the moment, so prices will have to rise 15-20% or many fellows won't be able to keep going," he said.

 

Research body Teagasc predicted that the new welfare measures for pigs coming in next January could have a similar effect to the battery egg ban this year, causing wholesale prices to soar 30-40% as farmers opted to exit the business.

 

Nearly three quarters (73%) of the cost of producing a pig is spent on feed, making pig producers particularly vulnerable to soaring prices just as new housing costs also hit, Teagasc expert Michael McKeon told a recent briefing.

 

The Irish Farmers Association described the situation as a crisis, blaming supermarkets for selling quality bacon at giveaway prices and the government for letting them.

 

Bord Bia figures show the price paid for pigs has risen by 6% this year, but official inflation figures show consumers are paying 5% less for pork and bacon.

 

"Consumers are benefiting from cheaper product as producers go out of business," said IFA Pigs Chairman Tim Cullinan.

 

"Retailers and consumers must accept that this cannot happen for ever."

 

Many pig producers are going to get out of the business in Ireland and Europe because of the double whammy of higher feed and welfare costs, and the upshot will be shortages and higher prices in the shops, said Cullinan.

 

Farmers are able to get 30% grants from the Department of Agriculture to meet the cost of new housing for pigs, but many will not be able to meet the shortfall.

 

There are 350 commercial pig farmers in Ireland producing 3.51 million pigs a year worth EUR1 billion (US$1.2 billion). They are concentrated mainly in Cavan and Cork.