Irish survey shows costs are on way up

19 July 2002

Irish survey shows costs are on way up

By Richard Allison

IRISH pig producers are among the most efficient in Europe with production costs at 75p/kg dressed carcass weight, but this is set to increase in future, according to an Irish survey.

The pig industry in Ireland accounts for 6% of gross agricultural product, higher than cereals and sheep, says Teagasc pig researcher Brendan Lynch, based at the Moorepark Research Centre, Co Cork.

"However, the industrys survival depends on keeping costs down and maintaining its competitiveness. Nearly 60% of pigmeat is exported to other EU countries, half to the UK."

A survey to compare production costs with other major pig producing countries, including Denmark, the Netherlands and UK, showed Irish producers to be efficient. Total production costs were highest in the UK at 92p/kg dressed carcass, 31% higher than Ireland.

One reason was high feed costs in the UK, due to the £s strength. However, feed costs in Ireland increased by 17%, nearly three times more than in the UK. Mr Lynch highlights that Irish pig producers rely heavily on imported cereals and protein feeds.

Another explanation for the lower cost in Ireland is that most units are entirely on concrete with few on straw and less than 1% outdoors.

Extensive rationalisation of the industry in the 1970s resulted in only specialist producers remaining with highly productive units, with an average total herd size of 850 pigs.

However, he believes the difference between countries is smaller, as one of the survey years, 1999, was not a typical year with poor pig prices. "There is some evidence that vaccine use and maintenance were cut back as units struggled to survive the downturn."

But he is concerned Irelands cost-competitiveness could be lost following the introduction of new environmental and welfare costs. Only 10-15% of sows are group housed, while more than 50% of pregnant sows are in tether stalls, which are being phased out over the next four years.

Stricter environmental measures have also been introduced since the survey was carried out. All units with more than 400 sows have to be licensed for manure disposal. This, together with the ban on tethers and stalls, will add an extra 3p/kg in production costs.

Shortages in labour have forced some producers to use east European workers. Around Cork there is a strong computer and pharmaceutical industry attracting labour, explains Mr Lynch.

Another important factor is the current spread of pig wasting diseases in other EU countries adding to costs. Currently, PMWS is not a problem in Ireland, he adds. &#42

The Irish pig industry will be less competitive after the introduction of stricter environmental and welfare measures, says Brendon Lynch.

Slaughter Feed Total

weight (kg) costs* costs*

Ireland 91 47 75

UK 90 55 92

Denmark 101 40 82

Netherlands 112 42 83

* p/kg dressed carcass weight

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