Irish Pig Prices on a Decline through 2013

8 August 2013, at 9:57am

IRELAND - There was a one per cent reduction in total EU pig slaughter in the period January to April 2013 in comparison with the same period in 2012. Total pigmeat production in that period in 2013 was virtually unchanged on the same period in 2012 due to a slight rise in slaughter weights, according to the mid-year outlook for Irish Agriculture 2013.

By mid 2013, pig slaughtering in Ireland was running behind the corresponding figure for 2012 by about 1 percent.

The June 2012 and December 2012 CSO pig numbers showed a decline in the pig breeding herd, indicative of a likely contraction in Irish pig production in 2013, so this observed decline in Irish throughput in 2013 was anticipated.

Pig feed prices rose through 2012 and have remained elevated in 2013, as illustrated in Figure 15.

By mid 2013 pig feed prices were about €60 to 70 per tonne (circa 20 per cent) higher than in the
corresponding period in 2012. To improve the economic performance of Irish pig production, sustained high pig prices were required in 2013 to offset the impact of high feed prices.

Irish pig prices rose through the latter half of 2012 and at the outset of 2013 were about 25 cents per kg ahead of prices at the beginning of 2012 as illustrated in Figure 16. However, Irish pig prices have moved into decline as 2013 has progressed and by July were only slightly higher than at the mid point of 2012.

Having been well below the EU average pig price throughout 2012, the Irish pig price converged on the EU average price in April 2013. However, since then the EU average price has risen by eight cent per kg while the Irish price has fallen by eight cent, opening up a 16 cent price gap between EU and Irish prices by the end of June 2013.

The rise in Irish pig prices in 2013 will be sufficient to ensure that the total value of Irish pig output
will increase in 2013 relative to 2012. However, the end result is that Irish pig producers will remain in financial difficulties, due to high feed prices, which will only be alleviated via a reduction in feed costs or an increase in pig prices.

A decline in feed costs in the second half of 2013 does seem plausible, given forecast cereal harvest prices, but it remains to be seen whether the Irish pig price can recover to closer to the EU average level in the coming weeks and months.