Ulster Farmers’ Union pork and bacon chairman, Jonny Cuddy, has warned that the drop in prices for pigmeat is forcing farmers out of business.
Speaking after participating in EU wide discussions he said there was growing concern that European pig prices had plunged by 20 per cent plus since last June.
“This has had a serious impact on producer margins. While there are many factors behind this fall in prices, the big problem is the imbalance in supply and demand as a result of the Russian trade embargo,” said Mr Cuddy.
Russia accounts for around a third of EU pigmeat exports, and that trade came to a complete halt when Moscow banned EU food imports last August. The industry has tried to develop new outlets but many of the products were tailored specifically for Russia, making it difficult to find other buyers.
“Where alternative markets have been found, products have had to be sold at a fraction of the price. On top of that, these new markets are not strong enough to offset the tonnage of pork that went to Russia, Ukraine and Belarus,” he said.
In response to the crisis triggered by the Russian ban, the European Commission implemented a private storage scheme in March. The aim was to remove surplus pork from the market, stabilise prices and allow producer margins to recover. Under this scheme, the Commission met part of the cost of storage for between three and five months. While this has stabilised prices the concern is what will happen when this pork comes back onto the market. The volume now in store across Europe equates to almost 800,000 pigs, or half the annual production in Northern Ireland.
“With the price here sitting at around £1.20 a kilo since early March, there are concerns that as the first of this product comes out of the scheme in July it could undermine traditional summer price rises,” said Mr Cuddy.
“If this happens, and consumer demand fails to recover over the summer, prices will remain under pressure as we move into the autumn/winter months – and that cannot be good for farmers or processors,” he added.
Given the scale of the threat this would pose to farm businesses here the UFU have highlighted the importance of regaining access to markets that have imposed restrictions on EU pork products.