Producers face profit squeeze

Pressure on profits continues


Sheep National
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PIG producers are continuing to battle some of their lowest returns on record, with no end to the challenging conditions in sight.

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TOUGH TIME: Freeling producer John Muster delivering pigs to the Dublin saleyards this week. Pig returns have been declining since the beginning of the year.

TOUGH TIME: Freeling producer John Muster delivering pigs to the Dublin saleyards this week. Pig returns have been declining since the beginning of the year.

PIG producers are continuing to battle some of their lowest returns on record, with no end to the challenging conditions in sight.

The prices being paid at the moment would be very close to the cost of production for some people, and in other cases, under the cost of production. - VIN ARGENT

House of Lindner auctioneer Vin Argent said at the Dublin pig market this week, female baconers averaged $2.35 a kilogram liveweight – a drop of 13 cents/kg on the previous week. Male baconers averaged $1.90/kg.

Today’s prices are about $1/kg lower than those being received at Christmas time, equating to about $100 to $150 less for each pig a producer sends in.

Adding to the lower returns was pressure from rising grain prices and electricity costs.

“The prices being paid at the moment would be very close to the cost of production for some people, and in other cases, under the cost of production,” Mr Argent said.

“The problem is the fact there is heaps of pig meat frozen in cold rooms at the moment.”

Mr Argent said it was fortunate that a Sydney buyer attended the market the previous week.

“The Sydney buyer took 132 pigs, and I think it could have been a case of some pigs not being sold if he wasn’t there,” he said.

Mr Argent said a positive was chopper prices, on the back of seasonal demand.

“Chopper prices are holding, bigger sows are making up to $440,” he said.

But seasonal demand could drop off soon, adding extra pressure to the market.

Mr Argent said a positive was that the backlog of heavier pigs was being cleared.

“Some people were holding on to pigs, hoping for a price rise, so we had a few pigs come in at 150-160kg, when you really want them between 90-100kg,” he said.

“It’s a bit of a vicious circle because people hold on hoping the price goes up, but then the weights are heavier, and you’ve got a lot more pig meat to clear.

“Even now, there are still quite a few 100kg-plus pigs coming in.”

Freeling producer John Muster has been selling pigs at the Dublin saleyards for many years.

“Prices were good at the start of the year but they’ve come back a lot,” he said.

“You’ve got to ride it out, because with pigs, you’re in it for the long haul.”

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