Pig prices in Northern Ireland have exceeded farmers’ full cost of production, according to Cormac McKervey of Ulster Bank. He said pig farmers had been under financial pressure over the past 18 months, but an increase in market prices and a reduction in feed costs had combined to improve their margins. McKervey said the potential for pig producers to make considerable debt repayments in a relatively short period of time was significant. He added that pig farmers were efficient and professional and would not leave the industry in large numbers.
McKervey attended the first day of Balmoral Show 2023 and welcomed the opportunity to meet farmers from all sectors over the four days of the event. He said he was aware of the pressure on milk prices since the turn of the year, but added that the basic fundamentals of dairy production remained sound. Ulster Bank was available to support individual producers, if and when required, he said. Beef prices remained exceptionally high, while the general prospects for sheep were strong, he added.
According to McKervey, farmers were getting acclimatised to the very strong input costs that had characterised all the commodity markets for the past 12 months and more. He said farmers should start to carbon audit their businesses now. “One very obvious indicator of this is the fact that merchant credit has not increased significantly despite the massive increase in feed and fertiliser costs,” he said. “However, the issue of climate change will have no bearing on how the banks deal with their farming customers at the present time.” Carbon audits and starting the journey to lower emissions was not something to be afraid of, he added.
Ulster Bank’s comments come as the UK government prepares to publish its plans for the future of farming subsidies and regulation. The government is expected to phase out direct payments to farmers over a seven-year period, with the money redirected towards environmental schemes. The plans will also include a new system of regulation that will require farmers to meet minimum standards on issues such as animal welfare and environmental protection. The proposals have been criticised by some farmers, who fear they will lead to a reduction in food production and an increase in imports.
The National Farmers’ Union (NFU) has said the government’s plans must ensure that UK farmers are not placed at a disadvantage by imports produced to lower standards. “The government must ensure that any trade deals it negotiates are not at the expense of our farmers and their high standards,” said NFU president Minette Batters. “We need a level playing field that rewards farmers for delivering public goods, protects our food security and ensures that we have a vibrant and sustainable farming sector.”