The milling industry is facing “serious difficulties” in sourcing payments for the feed delivered to pig farmers on credit, as the pig industry holds out on hopes of a €100m sectoral rescue package proposed by the Irish Farmers' Association (IFA) and undergoing negotiations with Department of Agriculture officials.
Should the credit extended to pig farmers fail to be recouped, the black hole of this bad debt will put a further “strain” on millers’ capacity to continue conducting business as usual with customers in other farming sectors, such as with beef or dairy farmers, feed compounders have said.
Feed mills typically supply pig farmers with feed and receive payment after a defined period which could be 30 or 60 days, for example.
As current pig prices are insufficient to cover costs and as banks have began restricting pig farmers from borrowing further, farmers are increasingly unable to pay feed bills.
The bare essentials
Millers have reported that farmers have cut feeding rates and are “feeding the bare essential” to their pigs.
One miller told the Irish Farmers Journal that one of one the home-mixers they supply had reverted to feeding a straight mix of barley, wheat and water.
“It’s carnage at the minute, things keep spiralling,” the commercial manager at Kiernan Milling told the Irish Farmers Journal.
“This month, we will see serious difficulties. We could be looking at a severe welfare situation.
“Everyone is absolutely pinning all hopes on it. There is no way fellas will pull out the other side of this without it. There would be bankruptcies,” he said in reference to the IFA’s €100m sectoral aid proposal.
Begging and borrowing
Some of those in the pig sector with outstanding amounts owed to feed suppliers have borrowed from family members to keep their lines of feed supply open.
“They have begged, borrowed and stolen to gather up the money for this month. They have started borrowing from family,” he went on.
“I have one [farmer], his mother borrowed money so he could pay the feed bill at the end of the month,” he said.