Pig bust to boom within a few months
Irish pig farmers have gone from bust to boom in a few months.
They experienced their lowest profit margin in 20 years in the early months of 2019, but a surge in pig prices has taken them to their highest level of profitability since 1996.
“If Ireland can remain African Swine Fever (ASF) free, in 2020 the sector is expected to experience one of its highest level of profitability in 40 years,” said Michael McKeon of the Teagasc Pig Development Department, at last week’s annual Teagasc Economic Outlook conference.
The Teagasc eProfit Monitor database has financial results from about half of the pig herd (75,000 out of an estimated 148,000 sows).
Michael McKeon said the November 2019 average profit margin of 31 cent per kg deadweight, equivalent to an average of €28 per pig, or €784 per sow, is expected to be at least maintained during 2020.
Ireland has only about 300 commercial pig farms, but the increase in prices should take the ex-farm value of the pigmeat sector to €750m in 2020, increasing its contribution to total agricultural output from 5.5% to 8%. All going well, annual profits could rise well into the hundreds of thousands on some of the country’s biggest pig farms, helping to compensate for low profits from the second half of 2018 into the first quarter of 2019.
Higher pig prices are usually short-lived, due to production on farms increasing in response, but that does not appear to be a factor in 2019, because significant debts, environmental pressure, and more demanding high-welfare housing requirements, have resulted in EU pig farmers becoming much more cautious about sow herd expansion.
Some may also be worried that ASF will spread from eastern EU member states, after infected wild boar were recently found in Poland only 70km from the border with Germany, which has one of the largest pig herds in Europe.
Irish pig prices have jumped from an average of €1.41 per kg deadweight in 2018 to nearly €2 currently, and are projected to go to €2.15 in 2020 — driven by continuing shortages in China, where 60% of meat consumed is pork, and the sow herd -— the largest in the world — has been halved by an ASF epidemic.
Only marginal increases (1%-3%) are expected in Irish pig feed prices in 2020.
