Dáil Éireann Debate, Tuesday - 18 January 2011
392 Deputy Joe McHugh asked the Minister for Agriculture, Fisheries and Food his commitment to the pigmeat industry here; if he will acknowledge the 165 kg and 170 kg costs of production; the current 135 to 136 cent per kg price that obtains today; to acknowledge that farmers receive just 17% of the shelf price; his plans to save the industry; and if he will make a statement on the matter. [2133/11]
Amharc ar fhreagraThe pig industry is a valuable component of the overall agri-food sector, and has a farm gate value in excess of €300 million. The sector supports approximately 7,000 jobs including production, slaughter, processing, feed manufacture and services and these are dispersed around the country. Production, prices and exports grew significantly during 2010 and the impact of this growth was felt at all levels of the production cycle.
Having said that, I am aware of the difficulties currently being experienced by the sector. While returns have improved in recent months and are forecast to improve in the medium term, the biggest issue for producers at the moment remains feed costs, most notably cereals and compound feed. Pig producers are especially affected by the increase in cereal prices since June 2009, given that cereals account for 75% of feed. This is reducing margins to below the long-term average, a situation which may have an impact on production decisions in both the short and medium term. Difficulties in maintaining credit facilities with suppliers and banks are exacerbating this situation.
Following a difficult year in 2009 prices began to recover early last year. This continued in the second quarter of the year to the extent that year on year prices exceeded 2009 levels in early July 2010. This recovery continued and, while the usual seasonal decline following the end of the barbecue season was again experienced, it was not to the same extent as in previous years. As a result, annual prices remained above 2009 levels and are still over 8% ahead with the price stabilizing in recent weeks. Currently the Irish producer price is approximately €130.00/100kgs. In general, Irish price movements over recent years have mirrored those of the EU as a whole.
The Teagasc Pig Advisory Service estimate that the cost of production averages between 155c/kg and 165c/kg. This includes non-feed and herd specific costs and varies between producers. Pigmeat prices are expected to improve significantly as 2011 progresses, while cereal output is expected to increase by mid-year. Both of these developments should improve the position for pig producers. Teagasc Advisory Services are working with producers, feed suppliers and banks to advance a number of initiatives to help pig farmers through this difficult period.
I met with the Irish Banking Federation last week and impressed upon them the necessity of improving and maintaining the credit flow to pig farmers. The IBF were positive about the efficiency and performance of the majority and indicated that viable pig producers would continue to be supported.
I am aware of reports which have highlighted the farmer's share of the price paid by the consumer. As you are aware pig prices are a function of the supply and demand dynamics in the market place. The ‘Food Harvest 2020 Report', which was published in July 2010, sets out the vision for the future of the food industry including the pig sector. Ambitious targets have been set in relation to sow productivity, the size of the national herd, together with a 50% growth in the value of output by 2020, and I have appointed a High Level Implementation Group to ensure that the recommendations in the report are implemented.
