PIG PRICES 12th DECEMBER

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Suppliers to the main export plants continue to receive pig prices ranging from €1.38/kg up to €1.42/kg.  Both Dawn Port & Bacon and Staunton’s continue to pay at the upper end of these quotes and have not reduced prices to their suppliers in recent weeks. Despite increased seasonal demand and reports of exceptional high prices for pigmeat in certain export markets, Irish processors have resisted calls to increase pig price.  Supply of pigs in Ireland remains high with last week’s kill over 74,000 and the national kill is over 100,000 ahead of 2017.  Plans are in place on all units with their processor to handle extra pigs either side of the Christmas break.

IFA Rural Development Chairman Joe Brady said the ANC increase for next year must be followed by a higher allocation to this vital farm income support scheme from €250m to €300m after 2020. The increase comes after the review of ANC areas, with €23m secured in Budget 2019.

Joe Brady said the increases are important and the proposal to allocate the highest payment on lands with the highest natural handicap is necessary as incomes are lower in these areas. The CAP Rural Development Monitoring Committee will discuss the proposals on Monday.

The new increased rates of payment follow on from improved payments under this year’s scheme with the allocation increasing by €50m in 2018 and 2019. Over 95,000 farmers benefit from ANC payments and this is likely to increase to about 98,000 in 2019.

The IFA Rural Development Chairman pointed out that the maximum payment for 2019 in Category 1 areas, formerly Mountain Grazing areas, will be €4,246 (on up to 34ha) an increase of €856 over two years; in Category 2, formerly called Most Severely Handicapped areas, will be €3,190 (on up to 30ha) an increase of €311 over two years; and in Category 3, formerly Less Severely Handicapped Areas, the maximum payment will €2,685 (on up to 30ha) an increase of €217 over two years.

The newly designated areas following the review will all be classified under Category 3. Following the review, 3.3m ha of eligible land is now classified under the ANC scheme which also includes off shore islands where a special designation exists. The maximum payment of €250/ha applies on the first 20ha.

In relation to areas excluded following the review, most farmers have now been written to by the Department of Agriculture. Where farmers appeal the Department will then provide the data by which their areas were excluded under the bio-physical criteria. IFA has also been told by the Department that areas that were never in can also appeal.

Joe Brady said that it was now important that the Appeals Body is set up without delay and an independent Chairman is appointed.

IFA National Dairy Chairman Tom Phelan today said that despite the Ornua PPI showing it lags behind firming powder trends for November, co-op board members preparing to decide on their November milk price must note that the case for a commitment to hold prices at least for the rest of the winter is getting stronger with more evidence of markets firming up. After a year where extreme income volatility came from weather related cost factors, farmers will need the support and confidence boost which such a commitment from their industry would give them.

“At its Outlook 2019 event Teagasc rightly highlighted an expected 22% income fall for average 2018 dairy farm incomes, mostly due to a major increase in production costs linked to a 50% additional expenditure on fodder and feed,” he said.

“On the market side, yesterday’s positive GDT auction has shown that global butterfat prices in particular have turned a corner. European food-grade SMP prices are continuing to firm to exceed €1600/t. Much more rapid disposal of SMP from intervention stocks had been carried out at rising prices rapidly trending towards current fresh feed grade levels in excess of €1350/t. EU Agriculture Commissioner Phil Hogan has even predicted all stock would be disposed of by spring,” Mr Phelan pointed out.

“We stated in recent weeks that output trends for year-end are well down in France, Germany and the Netherlands – which between them account for 46% of EU milk supplies, and 51% of EU’s exported milk. The lower output levels for the last quarter of 2018 are mostly due to weather events and fodder shortages, combined for the Netherlands with the effect of herd reduction forced by phosphates restrictions. Lower supplies and depleted intervention stocks have already, and will continue, to alter market sentiment in a positive way,” he said.

“Co-ops have supported farmers extensively during the fodder crisis of 2018, including through deferred repayments for inputs, free credit, rebates, even fodder imports, and this has been very much appreciated. However, farmers’ cash flows are in a bad way as the year comes to a close, with bills coming due, and lower seasonal milk volumes affecting milk cheques. Co-op board members must recognise that farmers will need at worst stable milk prices over the coming months, and thankfully market trends make this a realistic expectation,” he concluded.

IFA Animal Health Chairman Pat Farrell said the detection of Bluetongue in an imported animal in NI is a reminder of the risks associated with importing animals from regions of lower health status.

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Native grain prices remain broadly stable amid slow demand. Compounders continue to use higher percentages of maize in rations. Dry grain prices for 2019 are slightly weaker at €185/t for barley and €193/t for wheat.

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