Pig farmers are fleeing the industry as tumbling prices have driven losses for some of them to an estimated €62,000 a month, a new report says.
Irish pig meat prices fell to €1.42 a kg in March, while farmers say they need to earn about €1.90 a kg to break even as their costs rise. Prices have fallen in line with demand in domestic and international markets.
According to a new report, agriculture development agency Teagasc estimates that 10 per cent of Irish pig farmers have halted production.
Teagasc believes that 7 per cent of pig farmers have abandoned the industry, while a further 3 per cent have “destocked” and appear unlikely to return.
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The agency says that another one in five are now considering leaving the industry.
“Individual pig farm losses for a 600-sow farm ranged between €50,000 and €62,000 a month since the start of the year,” the report by accountants PwC states.
The accountants calculate that these farmers’ monthly losses are now averaging about €44,000.
Irish Farmers’ Association (IFA) national pigs committee chairman Roy Gallie said the document shows the industry is on the brink of collapse.
“The month of May showed no let-up with the average pig farmer losing €44 for every pig they sold,” he added.
The accountants calculate that the pig industry contributes €1.5 billion a year to the Irish economy.
It supports more than 8,000 jobs, while its exports bring in €932 million a year, the PwC report states.
However, farmers now face total losses this year of €127 million, while Government aid is likely to cover only 16 per cent of that figure, Mr Gallie warned.
“Pig farmers cannot continue to sustain those levels of losses,” he said.
He said farmers needed an immediate price increase to a minimum of €2 a kilogramme to help cut their losses.
The IFA is also asking the Government to consider backing a proposed joint industry €100 million stability fund to support the business.
The association, along with Meat Industry Ireland and the Irish Grain and Feed Association, proposes that the State provide the €100 million needed, but farmers would ultimately repay €50 million of this.
In return, the fund would provide aid to farmers based on their previous month’s sales during periods of significant industry losses, as determined by Teagasc.
“This report is a timely reminder of what exactly is at stake here if we don’t see progress on either front in the short term,” Mr Gallie argued.
The accountants’ report also suggests that the Republic could use the European Union’s State Aid Temporary Framework to support the pig industry.
This scheme is meant to allow member states aid industries caught in the fallout from the Covid-19 pandemic.
So far, 11 member countries, including Belgium, France and Poland, have used the framework to support their pig farmers.
In March, the European Commission approved a €50 million scheme based on the framework to support Irish beef farmers hit by Covid-19, the report notes.
“One of the potential challenges to using this framework could be demonstrating the link between the impact of Covid-19 and the rising costs in the pig farming sector,” it adds.
