Improvements in Pigs Trade Must Be Fairly Reflected in Producer Prices

Chairman of IFA Pigs Committee, Pat O’Flaherty has said farmers are expecting the recent upward price trend to continue over the coming weeks and months.

However, he warned that processors must reflect improvements in trade in producer prices in a timely fashion. A number of factors are influencing the price turnaround, including a strong export trade, tightening supplies and a steady demand for Irish product on the domestic market.

Irish pigmeat exports saw growth in 2015 which has continued into 2016 with total Irish exports in quarter one increasing 8% year-on-year. The greatest increase has been in exports to China, which increased 71% for the first three months of 2016 compared to the same period last year, equating to an increase from 9,100t to 15,600t. The value of exports from Ireland to China increased 119% year-on-year for Q1 2016. The latest monthly statistical report released by the EU Commission states that pork is the agri-food product that witnessed the highest increase in monthly export values for April 2016.

In addition, pigmeat imports are back 6% year-on-year for the same period to 21,900t. Bord Bia figures also indicate that overall pigmeat consumption has increased 1%, mainly driven by increased consumption in the sausage and rasher categories.

Chinese pig supply is likely to remain tight for the remainder of 2016 and Ireland should continue to benefit from this going forward. Demand for offal over the past 18 months has shown the most modest growth. With consumers in this market willing to spend more on food items, in particular for pork, where food safety and animal welfare are highly regarded. All indications point towards further opportunities for Irish exporters into this market.

However it is crucial that any gains achieved from increased exports to markets such as China are fairly reflected in producer prices. Producers have experienced one of the worst price crisis in decades and it will take a long period of strong margins to recoup the loses of the past 18 months.

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