Friday, March 29, 2024

Pig farmers question future

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Market demand is slow and pig meat prices have taken a dive in recent weeks as pork producers seriously question their future.
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Pig meat prices dropped 10 cents a kilogram in June with cost pressure really coming on from imported pig products, New Zealand Pork farmer spokesman Ian Carter said.

“Imports are coming in really cheap and compromising domestic prices.

“This is where Country of Origin Labelling (CoOL) is very important to us,” Carter said.

Misleading domestic food industry advertising is also a concern.

“We are seeing full page advertising and mailers where retailers are deviously putting all pork categories on the same page and that’s confusing shoppers when the NZ PigCare brand relates to just one, maybe two, of all products advertised.

“Without CoOL it’s a clear case of pushing us to become less competitive.

“It is becoming very evident that a lot we think provides us with a more confident environment is actually compromising us to be competitive in a globalised world.”

Carter said pig meat producers have been operating on a low schedule for 18 months but the latest drop matches the last significant decrease in 2007.

“A lot of farmers departed the industry after that and those left were pretty committed farmers.

“But some of those farmers are now saying they are not sure where we are going.”

Looking ahead, the industry indicators are not giving a clear message given the impact of imports, competing proteins and high feed costs as pig meat competes with reasonably high beef prices and very strong lamb.

“We don’t have the same light at the end of the tunnel.

“Importation of (pig) meat is crippling domestic producers.

“We are very sensitive to the consumer but what is not evident is that the signals are not noticeable at the retail shop level.”

The pig meat schedule shows pork fetching $3.50-$3.65/kg in the North Island and $3.45 in the South.

Bacon ranges from $3.40-$3.55/kg in the North and is $3.25 in the South.

The greatest proportion of pig products, about 75%, goes into bacon schedule pricing.

To say the schedule needs to be at $4/kg is not necessarily the answer, Carter said.

“How we get confidence to re-invest is about sustainable returns relative to our costs and at this stage of the year a lift of 20-30 cents would make a big difference.”

Traditionally. pig producers expect a lift leading up to Christmas.

“But there’s not confidence there at the moment to get that acceptable level.”

Feed prices, labour rates and increasing regulatory and compliance requirements are adding to producer costs.

“It’s not as simple for us as it is for a $120 lamb or a $7 milk payout. 

“If grain keeps pushing above $400 a tonne then under that environment, yes, we need $4 but we don’t if grain is at $300.

“We want to support our arable industry with a sustainable model based around grain but we are struggling right now.

“It’s tough going but we remain hopeful,” Carter said.

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