Producers May Be Forced to Shut Piggeries

PHILIPPINES - Hog producers continue to be shackled by low farm gate prices and insist that the market distortion is most likely to force many of them to shut their piggeries down as production costs zoom.
calendar icon 30 September 2008
clock icon 4 minute read

"The current situation is unprecedented, and has significantly affected the whole hog industry," said Albert Lim Jr., president of the National Federation of Hog Farmers, Inc.

Lim decried the low demand and the increase in pork importation by meat traders, adding that these are the primary causes of the industry's problems.

He said that while farm gate prices have gone down significantly, it is not reflected in the pricing at the markets, which also affects the consumers' buying power.

Farm gate prices currently averages at a high of P82 per kilogram and a low of P78 per kilogram. Before the Holy Week, the average price was between P115 to P117 per kilogram.

Lim pointed out that pork is still selling in the wet markets at an average of between P150 to P175 per kilogram, "turning off many consumers who are already suffering from the hike in the prices of basic commodities."

While it is traditional for farm gate prices to go down after the Holy Week, it has not stopped going down. "It did go down, slowly in the beginning, but we did not expect it to continue until now," Lim said.

In a meeting with Agriculture Secretary Arthur Yap, GMANews.TV reports that members of the NFHFI's Council of Presidents suggested that the Department of Agriculture come out with an information campaign to inform consumers of the right pricing for pork products.

Lim said their suggestion is similar to the suggested retail price practice of manufacturing companies.

The Agriculture department can post the SRP of pork products outside the wet markets so consumers are aware of the prices of pork and can themselves call the attention of the retailers.

"We have no control over the traders and the retailers, but as consumers, we can tell retailers that they should be selling their products at the right price," he said. "This way, everyone comes out a winner as consumers get lower prices and will buy more pork and producers can sell more hogs."

Lim said if the current trend of low farm gate prices is not addressed, it will have a domino effect in the pork production all over the country.

Although hogs and pork products from Mindanao saved the day for the tight pork supply in Luzon when it was hit by hog diseases, Gen. Santos City is now expected to take a hit since it adds freight cost to the cost of its pork supply.

"Before, we knew that pork prices fluctuate, but this is the first time that we've been hit by very, very low farm/live prices," Lim said.

He added: "This situation is a double whammy for hog producers, especially those who were hit by the swine diseases last year. Now that they have recovered from the effects of the disease, they cannot sell their hogs because of the low farm gate prices and low demand."

Many hog producers are contemplating on shutting down their businesses due to the high cost of production vis-a -vis the low farm gate prices.

The NFHFI president said many hog raisers are complaining and very worried because of the very low price as they barely make ends meet due to the increasing cost of production.

"How will hog farmers continue in this kind of situation?" Lim asked. "Although some commercial producers can continue doing business, take note that about 77 percent of swine producers are backyard farmers."

He added that the Department of Agriculture's (DA) latest report noted a significant decrease in hog production for the first six months. "Instead of going down, it should go up especially with the expected demand during the Christmas season," Lim said.

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