Pig sector struggling with low prices

MEP Diane Dodds
MEP Diane Dodds

DUP MEP Diane Dodds has expressed concern at the harsh price falls witnessed in the past three weeks which have affected the pig sector in Northern Ireland.

Commenting, Mrs Dodds also questioned whether the European Commission had done enough to help those affected right across Europe.

Mrs Dodds said: “There is no doubt that the pig sector in the last six months has faced a very difficult time, however over the past three weeks in particular pig meat prices have fallen at a dramatic rate, leaving many farmers producing pigs well below the cost of production.

“A number of reasons have been put forward in efforts to explain the downward pressure on pork prices.

“These include the ban on imports of EU produce into Russia and the significant reduction in Chinese markets, which collectively have led to an oversupply in the European market.

“The weakness of the euro compared to sterling has not helped matters, but we are beginning to see some movement on that front.

“While some markets have closed for business, work carried out by the NI Executive and processors has enabled pork from Northern Ireland to be exported to India in the past month.

“There is positive news that provisional approval has been granted to plants in Northern Ireland to export to China.

“Let us hope that these new markets see benefits for the primary producer as scale and access to these markets increase.

“Supermarkets and processors are key to ensuring firstly that a fair price is received for pork products, but also that the profit from these sales is fairly distributed throughout the supply chain.

“Many farmers have voiced their concerns to me that the distribution of profit within the supply chain is unfair with farmers taking the greatest risk but receiving little in reward.

“The European Commission has placed a lot of emphasis on the need to help those farmers who have been affected by the Russian import ban - by temporarily removing pigment from the EU market through Private Storage Aid.

“The hope would be that by removing product from the market this will stabilise prices and afford the market an opportunity to recover.

“Given the dramatic fall in pork prices, I believe the Commissioner urgently needs to reconsider their response to this crisis.

“The National Pig Association this week have called upon farmers to speak to their bankers sooner rather than later.

“This is an extremely worrying position for farmers and one which I continue to raise with the Commission – and through the work the Agri Committee is doing in relation to the supply chain,” Mrs Dodds concludes.

Meanwhile, the National Pig Association is urging pig producers to start talking to their bankers now, rather than wait until their cashflows are under serious pressure. Farmgate prices for pigs have plunged to their lowest level for eight years with little prospect of much improvement for the rest of the year.

“Some producers may not be aware how much banking culture has changed since they last needed to renegotiate overdraft arrangements, or apply for a term-loan,” said NPA vice-chairman Richard Longthorp.

“Local managers have far less freedom and flexibility and consequently putting new arrangements in place can now be a lengthy process, involving policy-makers further up the banking foodchain.”

Most pig-keepers will be operating in the red for some or all of this year, as the European pig-cycle reaches its lowest point in more than half a decade, driven by higher output and compounded by Russia’s embargo on European Union pigmeat.