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The ability to sell pork into the British retail market under the Red Tractor quality-assurance standard is insulating NI pig farmers from current price pressure seen across Europe.
Producers in the Republic of Ireland are competing in the European market and are receiving around 138c/kg (123p/kg), whereas NI producers have access to the premium retail market in Britain and typical prices are around 148p/kg at present.
“The retailers, and more importantly the consumers, are supporting Red Tractor. It has been a godsend to NI farmers,” said Ulster Farmers’ Union president Ivor Ferguson.
A source of frustration for NI pig producers in the past was the difference in price that farmers in NI were paid compared with counterparts in Britain, even though both products were produced to the same standard and were being sold on the same market.
Ferguson points out that the price difference had been as much as 18p/kg, but it has now largely disappeared. The former pig farmer has campaigned against price differentials between Britain and NI across various farming sectors.
He said that consumer demand for quality-assured, UK-origin pork lifted NI prices and provides NI producers with the opportunity for growth, as the UK is only 40% self-sufficient in pork.
Another factor in eroding the price differential was Hull-based pig processor Cranswick buying Dunbia’s pig processing facilities in Ballymena in November 2016.
Before this, Cranswick was only operating in Britain and when bidding for retail contracts had to compete with Dunbia and Karro, which both had access to a cheaper supply of Red Tractor pork in NI.
“One of the reasons Cranswick came to NI was to make sure that price difference was not there,” Ferguson suggested.
Feed
Increased feed costs are going against NI pig farmers at present, however profitable margins remain on farms as pig prices have held up.
Other factors that have helped NI pig prices include weak sterling, which has made pork exports more competitive, and NI gaining final approval to export pork to China in August 2017.
However, Ferguson highlights that it is not clear how improved market access has affected prices.
“It is a good thing that the processor is selling more product, but the question is how much are they sending back to the farmer,” he said.
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