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Bye bye bacon? Soaring costs threaten Irish pork industry

‘You just can’t make it work, you’re just haemorrhaging money,’ says pig farmer

A short distance outside Curraghboy, Co Roscommon, Peadar Kelly's piggery operation trundles on, like clockwork.

Mr Kelly's father, Seamus Kelly, began farming pigs in 1977, before he took up the mantle. His current operation is housed within a €1.5 million integrated pig unit, capable of holding 5,000 pigs from farrowing to factory.

But Mr Kelly’s piggery – like every pig farm in the country – is running at a significant loss, for a myriad of reasons.

“It’s a disaster situation,” Mr Kelly (40) says, speaking from his farm this week. “It’s the first time that we’ve been in a scenario as bad as this.”

The cost of feeding stock is the biggest issue facing pig farmers, he says, as it makes up roughly 80 per cent of farm overheads. Key components of pig feed – barley, wheat, maize and soya – have doubled in price since last summer.

An already dire situation was exacerbated by Russia's invasion of Ukraine, which provides Europe and North Africa with large volumes of cereals.

Mr Kelly points to a silo bin outside his piggery. “About 10 tonne of feed, that’s what it was holding . . . it’s gone to €4,000.” It used to cost €2,500 to fill, he says.

Plummeting pigmeat prices

On top of this, pigmeat prices have been falling steadily in recent months. The current market price stands at 141.64 cent per kilo – a fall of over 25 cent since last July, according to Bord Bia figures.

Farmers now face a scenario where pig prices do not cover feed expenditure – let alone pay for other overheads.

“You’re getting €112 or €115 for your end product, and it could be costing over €130 alone to feed [a pig],” Mr Kelly says.

“There’s no person in the country that isn’t losing money right now.”

Gary Pepper (36) farms a piggery of 7,000 animals – including 500 breeding sows – in Cootehill, Co Cavan. He estimates he is losing €2,000 a day, or €60,000 a month.

“I haven’t slept right in weeks,” he says, speaking from his home.

“You’re waking up at four or five o’clock in the morning, and you’re doing the maths again in your head, and you’re doing the maths and doing the maths and trying to rob Peter to pay Paul . . . You just can’t make it work, you’re just haemorrhaging too much money.”

Mr Pepper has relied on loans to keep his business afloat but concedes that the current trajectory is not sustainable.

“It’s very hard to convince anyone to give you money and you losing that type of money every month. There’s no saying how long this’ll go on for . . . it could go on for another three months, go on for six months.”

Unsustainable business

Mr Pepper says that he has no choice but to keep holding out – he has committed to buying feed up until the summer. The alternative is bankruptcy.

Other pig producers have decided to cut their losses. Roy Gallie, chairman of the Irish Farmers' Association's (IFA) pig committee, says that 14 or 15 producers have begun winding up their operations in the last month. The vast majority of these producers have quit because business is unsustainable, he says.

The end of the industry in Ireland is "staring us in the face", Mr Gallie says.

The crisis has led to some farmers culling their sows, Mr Kelly says. “Because they’re not going to be able to feed the progeny that they produce, simple as that.”

Colin Twomey (27) has plans to take over his family's piggery outside Mallow, Co Cork, once his father and uncle retire from farming in the coming years.

But the current climate has led to some difficult conversations.

“We would have that conversation, ‘is what we’re doing worth it?’” he says.

“My father’s worked his whole life with the pigs, he’s getting to the stage now where he only has a few years left, and for the next period of time, it’s looking like we’re going to be running at a significant loss.”

Brexit, Covid and war

Mr Twomey is still holding out hope – leaving pig farming would be “a last resort”.

Mr Pepper says the latest crisis is one in a series of critical blows for the pig industry. “Between Brexit and Covid and this war, it’s just devastating, it’s just written us off,” he says.

Brexit severely impacted Irish producers’ ability to export to the UK, as well as causing labour-related issues in pig factories. Covid also reduced the operational capacity of factories, leading to an overcrowding of animals in farms.

In Dublin last week, pig farmers staged a protest on Kildare Street, asking the Department of Agriculture to consider a proposed €100 million rescue package for the industry. If agreed, farmers would pay back half of the loan over a number of years.

Negotiations are ongoing, Mr Gallie says.

“It’ll be a short-term solution to get us out of losing huge amounts of money, to breaking even,” Mr Kelly says.

Ultimately, the price of pigmeat must come back up for the industry to get back on its feet.

For some, any rescue package is too little, too late, says Mr Twomey.

“For some people it’ll be enough, and we’re hopeful that it will come as soon as possible. But unfortunately, some people needed this payment last week or last month. That’s the reality of it.”