Pig production is a major sector in the agricultural economy of Ireland. Ranking third in importance after milk and beef, pigmeat amounts to about 7% of our gross agricultural output (GAO). The value of pigmeat exports in 2013 was €525m.
Despite a number of setbacks for European exports (including the Russian ban on EU imports), Irish pigmeat exports increased by 15% for the first half of 2014.
The pig sector is a significant employer, accounting for at least 1,300 labour units on farms with a further 7,000 employed in associated sectors, such as pigmeat processing, feed manufacture, haulage and services.
The pig sector survives on tight margins without the aid of any form of subsidy or protection from market forces.
It does this through improved efficiencies at farm level. There have been, and always will be, challenges facing the sector.
Food Harvest 2020 sets out some lofty targets for pigmeat production. Significantly, it identifies the need to address the profitability gap in the sector as a prelude to further expansion in the national sow herd.
Specifically, a reduction in feed costs per kilogramme of pigmeat has to be achieved, thereby reducing the gap between Ireland and many of the main pigmeat producing countries in the European Union.
The profitability and credit crisis in pig production since 2010 continues to keep many pig producers under serious financial pressure and has significantly curtailed plans for development and expansion.
Feed costs
Feed typically represents 70% of the cost of production, although this can vary significantly between pig units. Cost of production is the key factor in determining the cost competitiveness of Irish pigmeat.
Feed cost per kilogramme deadweight in Ireland compares unfavourably with many of the main pigmeat-producing countries within the EU; about 16c/kg deadweight higher than the average of Denmark, the Netherlands, France and Germany in 2013 (Source: InterPig 2013).
Higher feed costs in Ireland are due to a combination of the following:
Lower slaughter weights: This means reduced usage of the less expensive finisher feed in Ireland as a proportion of total feed per pig. Higher cost of diets: The average composite feed price in Ireland was €58/t more expensive than the average of Denmark, Netherlands, France and Germany.Cost of ingredients: Virtually all of the protein sources and a significant proportion of the cereals used to manufacture pig feed have to be imported, which means higher costs. Feed price volatility: While feed ingredient costs have decreased this year, the benefits can be slow to percolate to producers as a result of forward-purchases at higher prices.Diet formulation: The formulation of diets based on a net energy system (as used elsewhere) could yield feed cost savings of 1% to 2% (€3 to €6/t) to Irish producers. Feed credit terms: The use of feed credit represents a significant difference between feed purchase in Ireland and other EU countries. Producers normally pay for feed by direct debit within seven days of delivery in these EU countries. Teagasc found that the average length of credit in Ireland was 16 weeks. This incurs an effective interest rate of 1.5% per month, which is factored into the feed price and adds an additional €19/t at current feed prices. This issue needs to be addressed to enable producers return to profitability. Efforts have already been made to do this, but success will require intervention and assistance from our financial sector.Sow productivity
The average number of pigs produced per sow per year in Ireland (25.2) in Teagasc PigSys recorded herds is higher than the average for all herds (23.1), a difference of 2.1 pigs per sow per year.
However, the most recent data from InterPig shows sow productivity in Irish recorded herds to lag behind those of a number of EU countries (see Table 1).
While increased productivity is desirable, other implications must be considered. Other countries have seen increased piglet mortality with increased litter size, which raises welfare issues. What is the optimum litter size? How can we produce more viable pigs at birth and how can we keep them alive post birth?
Pig welfare
Ireland is fully compliant with legislation for group housing of pregnant sows. Animal welfare legislation is continuously under review.
Potential areas for attention at EU level include the type of environmental enrichment provided, restrictions on the use of farrowing crates, a ban on castration, further potential limitations on tail docking and teeth clipping, loose housing of sows after weaning, restrictions on the use of slatted flooring and adjustment to space allowances.
Environmental regulations
Current nitrates regulations (SI 31 of 2014) permit the application of pig manure to land in excess of the prescribed quantity (maximum fertilisation rate) of phosphorus. This transition arrangement is being phased out (completely removed 2017).
This will increase the area of land required to utilise pig manure as a fertiliser. It may result in increased transport distances for manure, with higher associated costs.
There is a significant challenge to reduce the volume of pig manure produced on units (primarily by improved water management), thereby reducing transport costs.
With future efforts focused on reducing our carbon footprint, there is an opportunity to replace chemical fertiliser with locally produced organic pig manure.
However, the forecast expansion in the dairy sector could potentially reduce the availability of grassland to utilise pig manure in some areas. And any move out of tillage to dairying could have the double-edged effect of reducing the available tillage land to utilise pig manure, as well as reducing the amount of home-grown cereals available for pig feed.
This is currently around 600,000t or almost one third of Irish cereal production. However, this is also likely to be a localised response, with no more than 0.5% of tillage land expected to move to dairying. The EU industrial emissions directive has the potential to impact on future development of pig farming across Europe. Currently, a technical working group is looking at best available technologies to reduce emissions from licensed pig farms. The consequences of this are unknown, but it could restrict future development. It will certainly add to the cost of pig production.
Export markets
Prior to the 2014 ban, almost 25% of EU pigmeat exports went to Russia. Despite this ban, Irish pigmeat exports increased by 15% for the first half of 2014. In the short-term, we need to look for other markets to replace Russia.
China has become an increasingly important international market. The consumption of pigmeat in China is likely to continue to increase. Recent access for Irish pigmeat into Australia and Vietnam is welcome, but we must continue to reach new markets.
Biosecurity
This time last year we were in the aftermath of the Porcine Reproductive & Respiratory Syndrome (PRRS) crisis here in Ireland. At the same time we were hearing about a new disease emerging in the US, Porcine Epidemic Diarrhoea (PEDv).
Since then, African Swine Fever (ASF) has appeared in eastern Europe. Neither disease has ever been recorded in Ireland. The economic cost of PEDv at farm level in the USA is estimated to be between $216 and $338 (€173 to €270) per sow space, with the loss of up to 10 million piglets alone last year.
The fact that we are an island gives us an advantage over many other countries, but we must remain vigilant to ensure that we adopt strict biosecurity measures to maintain this health advantage.
Pig production is a major sector in the agricultural economy of Ireland. Ranking third in importance after milk and beef, pigmeat amounts to about 7% of our gross agricultural output (GAO). The value of pigmeat exports in 2013 was €525m.
Despite a number of setbacks for European exports (including the Russian ban on EU imports), Irish pigmeat exports increased by 15% for the first half of 2014.
The pig sector is a significant employer, accounting for at least 1,300 labour units on farms with a further 7,000 employed in associated sectors, such as pigmeat processing, feed manufacture, haulage and services.
The pig sector survives on tight margins without the aid of any form of subsidy or protection from market forces.
It does this through improved efficiencies at farm level. There have been, and always will be, challenges facing the sector.
Food Harvest 2020 sets out some lofty targets for pigmeat production. Significantly, it identifies the need to address the profitability gap in the sector as a prelude to further expansion in the national sow herd.
Specifically, a reduction in feed costs per kilogramme of pigmeat has to be achieved, thereby reducing the gap between Ireland and many of the main pigmeat producing countries in the European Union.
The profitability and credit crisis in pig production since 2010 continues to keep many pig producers under serious financial pressure and has significantly curtailed plans for development and expansion.
Feed costs
Feed typically represents 70% of the cost of production, although this can vary significantly between pig units. Cost of production is the key factor in determining the cost competitiveness of Irish pigmeat.
Feed cost per kilogramme deadweight in Ireland compares unfavourably with many of the main pigmeat-producing countries within the EU; about 16c/kg deadweight higher than the average of Denmark, the Netherlands, France and Germany in 2013 (Source: InterPig 2013).
Higher feed costs in Ireland are due to a combination of the following:
Lower slaughter weights: This means reduced usage of the less expensive finisher feed in Ireland as a proportion of total feed per pig. Higher cost of diets: The average composite feed price in Ireland was €58/t more expensive than the average of Denmark, Netherlands, France and Germany.Cost of ingredients: Virtually all of the protein sources and a significant proportion of the cereals used to manufacture pig feed have to be imported, which means higher costs. Feed price volatility: While feed ingredient costs have decreased this year, the benefits can be slow to percolate to producers as a result of forward-purchases at higher prices.Diet formulation: The formulation of diets based on a net energy system (as used elsewhere) could yield feed cost savings of 1% to 2% (€3 to €6/t) to Irish producers. Feed credit terms: The use of feed credit represents a significant difference between feed purchase in Ireland and other EU countries. Producers normally pay for feed by direct debit within seven days of delivery in these EU countries. Teagasc found that the average length of credit in Ireland was 16 weeks. This incurs an effective interest rate of 1.5% per month, which is factored into the feed price and adds an additional €19/t at current feed prices. This issue needs to be addressed to enable producers return to profitability. Efforts have already been made to do this, but success will require intervention and assistance from our financial sector.Sow productivity
The average number of pigs produced per sow per year in Ireland (25.2) in Teagasc PigSys recorded herds is higher than the average for all herds (23.1), a difference of 2.1 pigs per sow per year.
However, the most recent data from InterPig shows sow productivity in Irish recorded herds to lag behind those of a number of EU countries (see Table 1).
While increased productivity is desirable, other implications must be considered. Other countries have seen increased piglet mortality with increased litter size, which raises welfare issues. What is the optimum litter size? How can we produce more viable pigs at birth and how can we keep them alive post birth?
Pig welfare
Ireland is fully compliant with legislation for group housing of pregnant sows. Animal welfare legislation is continuously under review.
Potential areas for attention at EU level include the type of environmental enrichment provided, restrictions on the use of farrowing crates, a ban on castration, further potential limitations on tail docking and teeth clipping, loose housing of sows after weaning, restrictions on the use of slatted flooring and adjustment to space allowances.
Environmental regulations
Current nitrates regulations (SI 31 of 2014) permit the application of pig manure to land in excess of the prescribed quantity (maximum fertilisation rate) of phosphorus. This transition arrangement is being phased out (completely removed 2017).
This will increase the area of land required to utilise pig manure as a fertiliser. It may result in increased transport distances for manure, with higher associated costs.
There is a significant challenge to reduce the volume of pig manure produced on units (primarily by improved water management), thereby reducing transport costs.
With future efforts focused on reducing our carbon footprint, there is an opportunity to replace chemical fertiliser with locally produced organic pig manure.
However, the forecast expansion in the dairy sector could potentially reduce the availability of grassland to utilise pig manure in some areas. And any move out of tillage to dairying could have the double-edged effect of reducing the available tillage land to utilise pig manure, as well as reducing the amount of home-grown cereals available for pig feed.
This is currently around 600,000t or almost one third of Irish cereal production. However, this is also likely to be a localised response, with no more than 0.5% of tillage land expected to move to dairying. The EU industrial emissions directive has the potential to impact on future development of pig farming across Europe. Currently, a technical working group is looking at best available technologies to reduce emissions from licensed pig farms. The consequences of this are unknown, but it could restrict future development. It will certainly add to the cost of pig production.
Export markets
Prior to the 2014 ban, almost 25% of EU pigmeat exports went to Russia. Despite this ban, Irish pigmeat exports increased by 15% for the first half of 2014. In the short-term, we need to look for other markets to replace Russia.
China has become an increasingly important international market. The consumption of pigmeat in China is likely to continue to increase. Recent access for Irish pigmeat into Australia and Vietnam is welcome, but we must continue to reach new markets.
Biosecurity
This time last year we were in the aftermath of the Porcine Reproductive & Respiratory Syndrome (PRRS) crisis here in Ireland. At the same time we were hearing about a new disease emerging in the US, Porcine Epidemic Diarrhoea (PEDv).
Since then, African Swine Fever (ASF) has appeared in eastern Europe. Neither disease has ever been recorded in Ireland. The economic cost of PEDv at farm level in the USA is estimated to be between $216 and $338 (€173 to €270) per sow space, with the loss of up to 10 million piglets alone last year.
The fact that we are an island gives us an advantage over many other countries, but we must remain vigilant to ensure that we adopt strict biosecurity measures to maintain this health advantage.
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