October 3, 2012

European herds have decline significantly and will become scarce and expensive in 2013 due to high feed cost brought about by reduced and drought-stricken corn and soy crop in 2012.

This means that in the second half of 2013, the amount of slaughtered pigs could fall by 10% in Europe, which would lead to a doubling in price. This is expected to be mirrored worldwide, according to the National Pig Association, based in the UK. 

In a daily livestock report by industry experts Steve Meyer and Len Steiner, the authors said that while they did not expect there to be a pork shortage, they believed "there is little doubt that pork supplies will decline in virtually every country as producers adjust to higher feed costs". They also warned that as China has over half of the world's pigs, any changes in that country's output could be significant. Domestic production costs have soared, they noted.

"The average cost of producing hogs in Iowa farrow-to-finish operations from 1999 through 2006 was US$52.76 per hundred pounds (cwt.) of carcass weight pork. That figure for last year was US$86.70/cwt. carcass weight and, based futures prices on Tuesday (Sep 25) will be US$90.16/cwt. carcass this year. Those same futures prices imply that breakeven costs will be US$95.96/cwt. next year. 

"While this year's drought has certainly pushed costs higher, it is not the reason for the vast majority of the cost increase. That reason would be the emergence and rapid growth of corn-based ethanol in the mid-2000s. This major new user of corn grew at a rate that could not be matched by corn production growth thus driving corn prices higher," read the report.

In light of this, it would be reasonable to assume that Cayman's own farmers could step up to fill any gaps. However, according to farmer Willie Ebanks, there are significant issues to do with storage to be surmounted.

 "If another US$200,000 had been put into a good cutting and packaging room at the abattoir, people would be willing to pay for the service. Labour, land and [other costs are] too expensive for us to be able to compete. It's not that we couldn't produce it, but we couldn't produce it any cheaper than they could bring it in; costs skyrocket," Ebanks said. He added that Cayman was quick to import goods to fill shelves, but this was not helpful to local producers.

Cindy Hutson, head chef at Ortainique, said that the restaurant has regular pig roasts and the pork feed situation was similar to that of the beef industry.

"I am part of the National Pork Board [in the US]. The pork roast is a gathering of friends and family, bringing people together at a big barbecue. The trend has gotten so strong toward pork again and chefs brought it back to being used everywhere in large quantities, but unfortunately the weather has caused havoc," she said.