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Monday 21.08.2017 | Name days: Linda, Janīna

Pig farms eliminated due to financial losses

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU, Inguna Gulbe

Inguna Gulbe

Due to the financial losses, farmers have started to eliminate pig farms or reduce production, keeping only sows, indicates the Head of the Agricultural Market Promotion Centre Inguna Gulbe.

Pork production costs have increased dramatically, because the feed prices, accounting for 65% of the cost price of pork, have almost doubled within a year. Energy resource prices have also surged, while pigs purchase price has remained stable, says Gulbe, indicating producers continue to sell meat on the average of 1.40 lats per kilogram, but the price of pork chops exceeds four lats per kilogram at stores. Also, ribs are sold at 0.75 santims, while their average price at stores is 2.30 lats. Farmers are suffering very heavy losses, Gulbe emphasizes.

As reported, the Head of the Latvian Association of Pig Breeders Varis Sīmanis said pig farming should be eliminated and breeders should require appropriate compensations from the European Union (EU).

The situation is catastrophic. Of 270 large farms breeding more than 300 000 pigs a few years ago, only 86 have remained with 200 pigs in each. At the remaining farms, the number of livestock has decreased dramatically. Currently, one tonne of grain costs 160 –165 lats; therefore, farmers cannot afford them, so pig farming generates losses of 22 lats per pig. We suggest liquidating the whole industry and receiving adequate compensations from the EU, Sīmanis says.

According to the Agricultural Market Promotion Centre data, the Latvian pork market is not uniform. The consumers’ demand for unprocessed pork is almost fully met by local supply at relatively high prices. While the prices of local pork are too high for meat processing, so raw material is imported at lower prices. Along with the declining purchasing power of Latvia’s population, excess supply is accumulating on the domestic market. Due to the high prices and small output, the export competitiveness is poor; accordingly, prices are not surging on the domestic market.

The Centre points out pork imports are stable – 30 000 tonnes, mainly from Poland and Germany, as well as from Estonia, Denmark and Lithuania. While meat exports do not exceed 2 000 tonnes. Meat is only exported to Lithuania and Estonia. Meanwhile, exports of live pigs, mainly to Russia, are steadily increasing and surpass 10 000 tonnes of live weight.

At the moment, the situation is very complicated. The year 2009 saw a similar crisis in the dairy industry; however, at that time the government allocated 27 million lats to dairy farmers. There is no indication that pig farmers could get a similar support this year. Currently, preference is given to those pig farmers cultivating their own grain for feed. Those who will survive this crisis, should further pay more attention to the long-term cooperation agreements with feed suppliers on the development of cooperation, in order to jointly purchase production resources and team up in conquering export markets, Gulbe notes.

Meanwhile, the Agriculture Minister Jānis Dūklavs emphasized on March 16 that the situation has exacerbated partly because of the inefficient management.

I do not see that pig farmers have foresightedly managed everything. While, livestock and poultry farmers, who had timely concluded agreements on the grain procurement, have not lost anything. Pig farming definitely has a future. In Russia, for example, pork meat costs six lats per kilogram, so there are opportunities for export, the Minister says, adding that so far the state has sufficiently supported the pig farming industry, so additional funding is not intended for it.

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