Ireland Has Lowest Pig Production Costs - Teagasc Survey
Issued 12th June, 2002
A Teagasc survey has shown that Irish pig producers are among the most efficient in Europe.
It shows that pig production costs in Ireland are lower than in the UK, Holland and Denmark, the three major competitors for Irish pigmeat exports to the UK market, the most important export outlet for the Irish pig industry.
The study, carried out by Antoinetta Lara and Paul Kelly of the Teagasc Rural Economy Research Centre and Brendan Lynch of the Teagasc Pig Production Research Centre at Moorepark, involved a detailed examination of production costs in the four countries in 1995 and 1999. See full study (1.3MB PDF)
The results show that Ireland had the lowest production costs in both years. The highest production costs were in Holland. In 1999, the cost per kilogram of pigmeat carcass was €1.04 in Ireland compared with €1.41 in Holland. The figures for the UK and Denmark were €1.32 and €1.14 respectively.
A major factor affecting costs in the UK, according to the authors, was the impact of the strength of sterling. Between 1995 and 1999, UK production costs increased by almost 15% compared with a drop of 8% in Ireland.
Because of the sterling factor, UK feed costs were the highest of the four countries. between 1995 and 1999, pig feed costs in Ireland fell by 17% in contrast to an increase of 6% in the UK. In Denmark and Holland feed costs fell by between 16% and 20%.
The survey shows that Irish pig producers have the lowest labour costs of the four countries, in spite of an increase in labour of 18% between 1995 and 1999.
The authors state that the cost of pollution control and extra manure storage capacity will impact more heavily on Irish producers than those in the other three countries. The additional costs could add 4cent/kg to production costs in Ireland. Producers in the other three countries have already incurred the bulk of these costs.
They also state that animal welfare provisions will also require significant capital expenditure, especially if loose housing for pigs is to become the norm.
''Ireland's cost-competitiveness could be lost following the introduction of these new environmental and welfare costs. Therefore, producers must maintain the drive for competitiveness and the processing sector must increase the value obtained from the consumer'', they say.
The Teagasc team is currently involved in investigating the processing and value-added elements of the pig industry.
