Teagasc economists believe that pig farmers’ incomes will fall in 2022 due to “slightly” higher input expenditure and increased output values.
In its Teagasc Outlook 2022, Economic Prospects for Agriculture publication, the state agency outlined that following “high profitability” in 2019 and 2020 and a fall in margins in 2021, the Irish pig sector will experience “very low” margins next year.
Pig farmers’ incomes
According to the report, pig farmers will see “a much tighter margin”. This will be because of a “significantly” higher feed prices outweighing a “modest” increase in pig prices.
The report states that in 2022, the size of the EU sow herd is likely to continue to decrease in the main pig producing countries, except for Spain.
Teagasc expects the size of the Irish sow herd to remain “unchanged” in 2022. However, it expects the volume of Irish pigs slaughtered to increase by 1% to exceed the 4 million head.
Furthermore, it expects the average Irish pig sale weight to increase by 1% in 2022 to 117 kg.
Pig prices and exports
In 2022, the Irish pig price is forecast to be a moderate 1.63c per kg. However, the report added that this forecast is “highly influenced” by ASF developments and Chinese import demand.
“The volume of pigmeat exports from the EU to China will have an important influence on the Irish pig price in 2022,” the report authors stated.
“It is expected that China’s import requirements will increase as 2022 progresses, with a higher Chinese domestic price making imports attractive.”
The report acknowledged that ASF would continue to feature in the next year. Economists added that Germany is struggling to prevent further cases due to infected wild boars crossing their border from Eastern Europe.
Feed prices, SA harvest and ASF
In terms of input prices, Teagasc stated that the December 2021 composite pig feed price of €363 per tonne will increase in Q1 of 2022.
In Q2 and Q3 of 2022, feed ingredient prices are forecasted to decrease, with expectations of higher harvest yields in the northern hemisphere.
Forecasts for the 2022 South American (SA) soybean harvest suggest it will increase relative to 2021 and is forecast to reach 140 mt.
Teagasc added that an increased SA harvest in Q1 2022 will reduce soybean prices for the remainder of 2022.
Also, the annualised composite pig feed price is forecast to increase by 6% in 2022 relative to 2021. This represents an increase to 125 cent per kg in 2022 compared with 118 cent per kg in 2021.