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Pigs

General Market Situation 2010

While prices, production and exports recovered somewhat during 2010, the impact of cereal price increases on the pig sector was significant. Margins fell below the long-term average in both Ireland and the EU and remained under pressure for most of the year. Increases in cereal prices in the early part of 2010 were exacerbated by severe weather events in both Russia and Australia during the summer. The supply restrictions arising from these incidents were added to by the continued shift in production towards ethanol which has resulted in upward price pressure on quantities produced for animal feed and human foodstuffs. The more than doubling of both wheat and barley prices since September 2009 has impacted most severely on the pig sector given that these cereals account for almost 75% of pig feed. There was progress in reopening remaining markets closed following the dioxin incident, namely Russia and China and trade recovered in both these countries. The programmes launched in the wake of the dioxin outbreak; the Pigmeat Recall Scheme and the Pig and Cattle Disposal Scheme, were managed successfully during the year with significant claims settled. The continued absence of Export Refunds on fresh and frozen pork destined for non-EU countries has made the situation more difficult for exporters and Ireland, in common with a number of Member States, has strongly pressed for their reintroduction. In recognition of the fact that the sector across Europe is facing difficulties the Commission held a gathering of stakeholders from throughout the sector and have pledged to establish a high level group to monitor developments during 2011.

Output in Ireland

During 2010 the output value attributable to pig production reached over €330 million, an increase of almost 8% on 2009 values. Much of the production and herd declines experienced in the wake of the pigmeat recall were recovered and this was reflected in the level of both disposals at meat plants and live exports to Northern Ireland.

Table3.7 

Prices

Producer prices continued to fall in the early part of 2010 but recovered from mid March onwards. The average price during 2010 was €130.59/100 kgs which amounted to 93% of the EU average. Weekly prices ranged from €117.50/100 kgs in January to €141.41/100 kgs during the summer and ended the year over 8% ahead year-on-year.

Figure3.9 

Slaughterings

During 2010, approximately 2.6 million pigs were slaughtered in DAFF export-approved plants. This equates to an increase of over 10% compared to 2009. Approximately 81,000 sows are included in this 2010 figure, some 5,500 higher than the previous year. Pork accounted for almost 97% of the total.

Exports

Pigmeat export volumes increased during 2010 by almost 10% and reached 134,000 tonnes. Coupled with largely unchanged average prices, this led to an increase in value terms to some €317 million.
The UK continues to be the largest single market for Irish product despite a near 10% decline in volumes. Trade in pigmeat to this market amounted to almost €195 million and accounts for around half of volume and two thirds of total value. Despite a difficult trading environment in many Continental European markets, the volume and value of trade increased marginally. The reopening of the Chinese and Russian markets to Irish pork following the dioxin outbreak, together with a robust performance in Japan, saw both the value and volume of pigmeat exports increase significantly in international markets.

Outlook 2011

Following the rebuilding efforts during 2009 and 2010 which have largely proven successful, the Irish pig sector faces a difficult and uncertain short term future. Recent increases in cereal prices are having a significant impact on pig producers and these developments will inform production and supply decisions during the coming year. While cereal price increases impact on most agricultural sectors, pig producers are especially affected given that cereals account for almost 75% of feed. Margins declined considerably during 2010 and the EU Commission are not forecasting any recovery before mid year. Coupled with this are difficulties in obtaining credit from feed mills and general cash flow issues and this is putting the sector under considerable pressure. The Commission are further predicting a small increase in supplies during the first half of 2011. Pigmeat remains the most consumed meat worldwide and this will continue to present opportunities for Irish producers, given our self-sufficiency, but further recovery in prices is essential if production is to remain viable.