Mr. Cormac Healy:

The chairman pointed out that annual pig meat production in Europe is over 23 million tonnes. We produce about 300,000 tonnes in Ireland annually so we are less than 1.5% and anything we do will not influence it. There are a number of dominant markets around the world that will dictate what happens. China is the major importer of product and the EU is a significant global player that exported in the region of 6 million tonnes last year, which gives it a big influence. Then there are North and South America. We expect to see some easing in production across the EU in response to what has been a difficult price and cost situation. There will be some response in easing production. Production is back considerably in Germany as well and they are operating well below their normal throughput levels, which should help to stabilise matters.

I mentioned China and you hear talk about Japan and South Korea as well and they are still struggling with Covid and the pandemic. Members have all heard about the new lockdowns in China in recent times and it is still causing disruption in the food service and in demand there. It has to be expected that prices and imports in China will increase as the year progresses. I stand to be corrected on this but I think that domestic production in China is operating below the cost of production. Their retail pig price is 50% of where it was one year ago, as is the piglet price. Import prices are about 30% below where they were one year ago so there has to be a level of price recovery. They cannot continue to produce below the cost of production and hopefully the rising tide will lift all boats. The US remains strong in its domestic demand and their price has been strong. Some of those farmers are far less impacted by the feed cost issue we have in Europe. The reality is we have an additional feed cost again in Ireland because we have to get the material, including the grains and protein, across. That is an added cost in the context where we all know that transport costs are increasing dramatically.