Irish pigmeat exports were up 4% in the first quarter of 2018, driven by increased output, Peter Duggan, Bord Bia’s sector manager for pigs and poultry, has said.
“The breeding herd increased by 2% in 2017 on the back of it being such a good year. It led to a recovery in confidence for the sector and we have seen supplies increase all over the EU,” he told the Irish Farmers Journal.
This increase in supply has led to a challenging period for Irish pig producers and has seen them operating below the cost of production in many cases.
“All that excess supply needs to find a home,” Duggan said. “The UK is still by far our number one trading partner (56% of total exports). Holland, Germany and Denmark control 80% of UK imports between them and we have to be able to compete with these extremely efficient producers.”
To date, exports to the UK are down 6% to 23,400t. This is coupled with a decline of 12% to 14,900t in China, the second most important market for pigmeat.
“China has proved challenging so far this year. There has been major restructuring in their herds, so many of the smaller producers have liquidated their businesses. That has really reduced their demand for imported meat.
“That market is key not only in terms of volume but also for carcase utilisation and maximising returns as they take a lot of our bone and offal.”
Diversification
In a bid to combat the decline in the main markets, there has been a concerted effort to diversify Irish exports.
In the first quarter, Japan, South Korea and the Philippines have all recorded strong growth.
Together they have recorded a staggering increase in volume of 74% compared with the first quarter of 2017 from 4,200t to 7,200t. Although they are modest amounts individually, together they have been able to absorb the supply that has been displaced from the larger markets.
“We are very hopeful for Japan. Given our product will be tariff free in the near future after agreeing a trade deal, we will be much more competitive there.
“Also, after Mexico’s response to US tariffs on some of their imports, they have placed a 30% tariff on US pork.
“That means they will be looking to import from somewhere else. Although we do not have access there yet, they will absorb some of the excess supply on the world market,” Duggan said. He added work was ongoing to secure Irish access for pork into Mexico.
To aid diversification efforts and grow the Irish presence in the far east, Bord Bia has secured additional funds for recruitment in the area. “These new posts will be able to support processors in these growing markets.”
On a recent trade mission to China, Bord Bia received signals from Chinese authorities that one of the last remaining key processors had secured market access to China. This news will be welcomed given the difficult year 2018 has proved for all involved in the pig sector.
'Times are tough' in the pig sector