Steady pig prices of between €2.36/kg and €2.46/kg are allowing pig farmers to make progress on repaying the enormous borrowings which were undertaken last year.
The buoyant prices come on the back of tight pig supplies, with Ireland’s kill from January to June 10.5% behind the same period in 2022 and EU throughput running 8.9% lower.
Teagasc analysis suggests that it will be the second quarter of 2024 by the time farmers will have “largely recouped most of the 2022-23 losses” and they can start looking at investing in facilities after three years of low investment activity in the sector.
The average 600-sow unit made a €522,000 loss between September 2021 and April of this year.
“Strong sellers” willing to move pigs around to get the best factory deals are coming out with the best prices, IFA pig chair Roy Gallie told the Irish Farmers Journal.
“Costs have come back and deals are being done. But we will still be filling the hole left from the crisis for months and even then, it will only leave fellas even Stevens,” he warned.
“And there is already talk of more pigs, more sows, coming back into the system which will see a new supply balance having to be found.”
The pig chair stated that the Pig Exceptional Payment Scheme (PEPS) saved many farmers from going to the wall and some who reduced numbers are now in a position to begin rebuilding sow herds.
“The crisis pig supports got for producers in 2022 definitely saved the day for a lot of the more vulnerable farmers.”
Gallie said that pig farmers’ focus, aside from making borrowing repayments, is now turning to “draconian” EU environmental and animal welfare proposals that he sees as having the potential to hugely increase production costs.
“The volatility remains difficult to cope with too. It’s the time it takes to rectify any reaction to the market that is the challenge,” the pig chair added.
“I was even talking to a supermarket manager recently and it seems to have hit home. If you don’t get the sums right, people won’t produce food.”
Cork pig farmer Tom Sherman maintains that “things are getting a bit easier” in the sector but “48 months of good trading” will still be needed to clear the debt.
“There is a better outlook in the sector, but just because things turn around doesn’t mean that there isn’t huge challenges,” he commented.
“There are serious crisis repayments to be made, qualified labour is difficult to get and energy is still very expensive.
“I think retailers have woken up to realise that if you do not pay for meat, it won’t be there. The cheap food policy does not work.”