The Interpig Group was set up in 2003 to look at physical performance figures and to compare the cost of production of pigmeat in the participating countries. The Interpig data for 2014 has just been finalised. The data for the Irish pig herd has been selected from the herds using the Teagasc e-Profit Monitor (ePM) record system. The cost of pigmeat production in Ireland and selected European countries is discussed in this article.

The other countries selected from the Interpig data are Denmark, France Germany and the Netherlands. The data presented is from 38% of the sow herd and 21% of the finishing herd in Denmark; 37% of the sow herd and 39% of the finishing herd in France; 8% of the sow herd and 14% of the finishing herd in Germany; and 34% of the sow herd and 28% of the finishing herd in the Netherlands. The data for the Irish herd represents 56% of our national sow herd and 52% of the finishing pigs.

In the early 1990s, Ireland produced more pigs per sow per year than any European country. Table 1 shows the number of pigs produced and the output per sow in 2014 for selected countries. The Danes are leading the field, with each Danish sow producing 3.14 more pigs per year than the average sow here.

Some units in Ireland are producing as many pigs as the Danes but our overall average figures tell us that we are still behind on this parameter. In 2009, the number of pigs produced/sow/year in Ireland was 23.3. This has improved by 2.24 pigs/sow/year in 2014. The Danish figure was 25.63 in 2009, an improvement of 2.85 pigs/sow/year in the same period.

Many factors can affect performance, such as health status of the herd, genetic improvements, quality of feed ingredients, sale weights, etc. It is difficult to take all of these factors into account when making comparisons.

The next area to examine is the growth performance from weaning to sale. The relevant figures for the same countries are shown in Table 2. Denmark has the highest average daily gain (ADG) from weaning to sale. The Netherlands has the highest slaughter weights but the lowest ADG from weaning to sale.

The best feed conversion efficiency (FCE) is being achieved in the Netherlands, even though they are dealing with a proportion of castrated male pigs and heavier sale weights. In Ireland, we have lighter sale weights and do not castrate our male pigs.

A ban on castration may reduce the higher deadweight in some European countries.

Feed costs

Feed is the biggest component of the pigmeat production cost. Our growth rates compare favourably to the French, Germans and the Dutch, but are lower than the Danes. Our feed conversion figures are similar to the French, but higher than the Netherlands. The bottom line for 2014 is that, based on their feed costs, and the figures above, the average feed cost per kilo of carcase was 92c in Denmark, 94c in the Netherlands, 98c in France, 105c in Germany and 116c in Ireland.

Our ADG from weaning to sale is similar to that achieved in the Netherlands but their FCE was better than ours (Table 2). Their feed cost is 22c/kg better than ours. In Ireland, we use more of the “more expensive” weaner/rearer diets than other countries.

We feed these diets to pigs from weaning up to 37kg liveweight (which equates to 54.8kg of feed), while in the Netherlands they feed them up to 25kg liveweight (28kg of feed/pig). Why are we leaving pigs on weaner diets for so long? Our feed costs are considerably higher than feed prices in other EU countries. The average feed prices per tonne are shown in Table 3 below for each country. Some of the price differential in cost per tonne may be attributed to higher transport costs of getting feed ingredients to Ireland, and to higher levels of feed or merchant feed credit. These are costs that the Dutch and Danes do not have.

Other variable costs

Table 4 shows the other variable costs (ie other than feed) associated with pigmeat production. Ireland fares well in this regard mainly because our “miscellaneous” costs are lower. The issue of slurry/manure management is more costly in Denmark and particularly the Netherlands.

We need to be careful about the interpretation of some of these figures. For example, there is a risk that after a “bad” year or a number of “bad” years (ie when money is very tight) items such as “repair and maintenance” may be under-reported as the level of work carried out on farms is kept to the minimum.

Fixed costs

Fixed costs are costs that exist irrespective of the output of the business. The building depreciation cost and interest cost of buildings are calculated using current building costs and typical interest rates for each specific year. Table 5 shows these costs. The interest cost on working capital is mentioned below.

Total production costs

The total production cost of pigmeat is shown in Table 6. It ranges from €1.54/kg in Denmark to €1.74/kg in Germany. These figures do not include interest on working capital which would add 1c extra per kg. The high feed cost in Ireland is the main issue we need to address if we are to compete with our European counterparts. These figures show that we need to monitor closely the improvements other countries are making and strive to match their performance. All farms need to measure their own performance and should not be afraid to benchmark their results against other producers, both within Ireland and other European countries.

Pig price monitor

The pig development department of Teagasc monitors feed and pig prices from a group of twenty farmers each month. This has compiled data for the sector since 1992. It looks at the feed cost based upon the average performance of herds using the Teagasc pig record analysis which is now on the e-Profit Monitor.

In the past four years (2011 to 2014) the margin over feed as recorded by Teagasc has been 44 cent. Pig producers need a margin of 55 cent based upon the production costs shown above plus one cent to cover the interest on working capital. Is this economically sustainable?

Read more: Pig prices reported to IFA