A number of years ago, an Irish political party used the electioneering slogan “a lot done, more to do” to describe the national economic progress at the time.
This slogan could be adopted to “some done, but a lot more to do” to describe the current state of play of the Irish pig sector.
Why only “some done”? To explain this, we need to have a quick history lesson on the last three years of the Irish pig sector.
After 20 months of continuous monthly losses, the Irish pig sector returned to long anticipated profitability in May 2023. During the long, financially difficult period of August 2021 to April 2023 inclusive, the average family pig unit lost an estimated €583,000 in cash terms.
This was largely due to the rapid escalation in pig feed costs (+40%) over the 12-month period from September 2021 to August 2022, primarily due to the Ukrainian war.
Unlike ruminants, pigs simply can’t be “let out to grass”. Therefore, every kilo of feed required to feed a pig, rose in price. Unfortunately, the pigmeat price didn’t follow suit as rapidly.
There was a lag phase for a few months before pig prices began to rise significantly, hence the very significant financial farm losses during this period, the worst in a generation.
At times, a sceptical public questions if farm losses are so bad why are people still doing it?
Well, in this case unfortunately, approximately 16,000 sows, equivalent to 11% of the national herd, did leave the sector. This has created an estimated 430,000 head reduction on an annualised basis in pig supplies to processing plants.
This is a significant decline for a sector worth €1.49bn to our economy (PWC, 2022).
A partial recovery in the national sow herd size is expected over time depending on the sector’s profitability but the overall supply may be 200,000 to 250,000 pigs lower in the medium to long term.
Thankfully, ‘the darkest hour is before the dawn’ and since May 2023 the pig sector has returned to good profitability, through moderately lower feed prices and a healthy pig price.
However, it’s still a long road before the sector recoups the financial loss incurred since August 2021.
At current profitability levels, it’s estimated it will be July 2024 before these losses are recouped.
An additional challenge is that the severe losses resulted in a significant backlog of essential capital repair/investment on pig farms. These upgrades are now being slowly tackled as the current profitability allows, and this work is essential if the sector is to maintain efficiencies and national herd size into the future.
So, in conclusion, the current recovery of the Irish pig sector can be best described as “some done, but a lot more to do”.