Pork and bacon update
Friday, 24 March, 2023
Commodity watch by policy officer David McClure
The Ulster Farmers’ Union (UFU) pork and bacon committee has been focused on several work streams over recent months. A notable success story for the committee has been the delivery of support to the sector in the form of the Department of Agriculture, Environment and Rural Affairs (DAERA) Exceptional Costs Pigs Scheme. The UFU approached then DAERA Minister Edwin Poots, about this issue in Autumn 2022. Afterwards, a meeting was arranged where UFU presented facts around the current market situation to DAERA. Committee members outlined the economic stress which the sector has endured since the onset of the war in Ukraine. Spiraling input costs had left huge dents in bank balances whilst the markets struggled to react and cover the deficit. DAERA considered the content of our presentation in the following weeks and committed to delivering £1.6m of support. This support, delivered on a headage basis, has recently been paid out. The support money granted by DAERA, whilst a useful contribution, will not fill the void which was accumulated in the first six months of 2022. The application process, facilitated by DAERA, was simple and easy for our members to transact. The UFU acknowledge DAERA’s commitment to support the sector.
Market conditions for pig producers in Northern Ireland (NI) are somewhat improved from that of 12 months ago, with future signs of further improvement now showing. Supplies of pork products remain tight across Europe and this has seen European prices increasing closer to UK levels in recent weeks. Not only does this movement encourage further increase of UK prices, but detracts from the likelihood of imported products appearing on the shelves of UK retailers. Of course, production costs remain high, with cereal and protein sources still trading at strong prices, and energy prices remain a huge concern for many. That said, our members are now reporting more favourable trading conditions. With the price of cull sows at strong levels, perhaps some producers have seen the return to positive cash flow as an opportunity to exit the sector.
Committee members remain concerned about the threat of African Swine Fever (ASF) as a factor which could decimate any market gain. The disease is common in parts of Europe and whilst the absence of a wildlife host (e.g., wild boar) in NI is a huge strength in our defence, a real risk still exists in the form of contaminated meats. The movement of meat products by both legitimate and illegal methods into NI is a concern of the committee. As such, UFU has been reaching out to DAERA in order to understand what controls are currently in place. This contact has seen the re-establishment of the Pig Core Group where industry stakeholders all convened to understand the risks of disease, how to limit these risks and how to deal with an incursion if it occurred. The committee intend to use the core group as a mechanism to learn, evaluate and improve on controls of product moving to NI. The inaugural meeting of the group saw a briefing on the effectiveness of border controls. The UFU look forward to engaging further with the group, with the ultimate aim of protecting the industry from the incursion of any disease.