According to this month’s pig league, pig prices are 13-15% ahead of October 2015 with a weighted average of €1.56/kg VAT exclusive. This suggests that in October 2016, pigs were just in the black on a feed price of €105c/kg in comparison to the loss of 10c/kg that pig farmers were carrying in October last year.

Only the major processor moved pig prices in a negative fashion and the word is that a proportion of this was recouped by farmers in advance of November’s second drop. The EU average pig price had been trading 4c/kg ahead of Irish prices but EU pig prices fell more than Irish prices in October (-11c/kg v. 2c/kg). Since the last time that Irish and EU prices were on par at week 20, the Irish price has been up to 12c/kg adrift of the EU price but for the year to date there is only 1c/kg separating the EU and Irish average with the Irish price now 103% of the EU average.

Any negativity currently in the market has been well buffered this year by a very strong performance for the Irish processing sector during the summer months. In America, the futures have recovered somewhat and analysts (Whole Hog) suggest that the “bulge” of pigs in the US will have been absorbed early in 2017, helped by the early Chinese New Year. EU exports into the Chinese market January to August 2016 were up 97% on the 2015 figure and although there is negativity in the media about a slowdown, Rabobank is predicting that “while imports are slowing, the total import volume in 2017 will be similar to the level of pigmeat imports in 2016” and that was pretty positive.

Pig Industry Stakeholders Group: good timing after all

In January of this year, the report of the Pig Industry Stakeholders group was published and at that stage it was envisaged that a committee would be set up to oversee the implementation of the recommendations. Fast-forward past a new Government, Brexit and a short period of profitability to what appears to be a more difficult climate for the entire European pig industry and a group meeting is being convened.

A number of the recommendations, upon implementation, could be of real assistance to farmers such as Bord Bia completing a review of product pricing, positioning and marketing, variety and presentation of cuts. The reports states that the foodservice sector, which accounts for €91m of pork products and €188m of bacon products (2014 figures) is majority sourced from imported meat.

IFA has already been using the DNA programme to ascertain uptake of Irish pork in the food service sector and a change in this would be of enormous benefit to Irish farmers, as would the additional recommendation that where possible, and in compliance with procurement rules, State agencies should use Quality Assured pork products.

Results of the EU Commission forecast group

A number of EU pig producing countries including Denmark, Poland, Austria and France are forecasting drops in Gross Indigenous Production into 2017 and although Germany is forecasting an increase in Q1 and Q2 of 2017, they are expecting a drop in Q4 2016. As is always the case with pig prices, direct comparisons between countries are very difficult due to different payment structures, each country’s prerequisites on grading (all payments below are for grade E pigs) and bonus payments. Suffice to say, it is better to focus on the percentage change in pig prices that each country is forecasting for the remainder of 2016 and into 2017, which are all in very positive terms.