Failed feed crops and smaller herds send costs soaring
Pork is going to be scarce and expensive in 2013, according to an industry trade group.
The National Pig Association, based in the United Kingdom, said that drought conditions had led to a vastly reduced corn and soy crop in 2012. This decline in feed has led to European herds declining “at a significant rate”. This means that in the second half of 2013, the amount of slaughtered pigs could fall by 10 per cent in Europe, which would lead to a doubling in price. This is expected to be mirrored worldwide, said the report.
In a daily livestock report by industry experts Steve Meyer and Len Steiner, the authors said that while they did not expect there to be a pork shortage, they believed “there is little doubt that pork supplies will decline in virtually every country as producers adjust to higher feed costs”. They also warned that as China has over half of the world’s pigs, any changes in that country’s output could be significant. Domestic production costs have soared, they noted.
“The average cost of producing hogs in Iowa farrow-to-finish operations from 1999 through 2006 was US$52.76 per hundred pounds (cwt.) of carcass weight pork. That figure for last year was $86.70/cwt. carcass weight and, based futures prices on Tuesday will be $90.16/ cwt. carcass this year. Those same futures prices imply that breakeven costs will be $95.96/cwt. next year.
“While this year’s drought has certainly pushed costs higher, it is not the reason for the vast majority of the cost increase. That reason would be the emergence and rapid growth of corn-based ethanol in the mid 2000s. This major new user of corn grew at a rate that could not be matched by corn production growth thus driving corn prices higher,” read the report.
In light of this, it would be reasonable to assume that Cayman’s own farmers could step up to fill any gaps. However, according to farmer Willie Ebanks, there are significant issues to do with storage to be surmounted.
“The supermarket butchers do not want to be slicing up whole pigs; they will order a container of pork. There is no cutting, storage or packaging at the abattoir. There is no cutting room so you cannot butcher a pig and take it there. There are not the facilities to do it and it is beyond ridiculous. You talk about the Nation Building Fund – well you should first think about feeding your people who help build the country. Agriculture is pushed on the back burner but when the containers do not come in we get the call.
“If another $200,000 had been put into a good cutting and packaging room at the abattoir, people would be willing to pay for the service. Labour, land and [other costs are] too expensive for us to be able to compete. It’s not that we couldn’t produce it, but we couldn’t produce it any cheaper than they could bring it in; costs skyrocket,” Mr. Ebanks said.
He added that Cayman was quick to import goods to fill shelves, but this was not helpful to local producers.
Cindy Hutson, head chef at Ortainique, said that the restaurant has regular pig roasts and the pork feed situation was similar to that of the beef industry.
“I am part of the National Pork Board [in the United States]. The pork roast is a gathering of friends and family, bringing people together at a big barbecue. The trend has gotten so strong toward pork again and chefs brought it back to being used everywhere in large quantities, but unfortunately the weather has caused havoc,” she said.
“You don’t know what is going to happen next. It isn’t great news for the customer across the board, and not great news for the restauranteur. With our economy the way it is, if you continue to serve corn on the cob, certified Angus beef, Berkshire pork, you need to pass on your increases somewhere along the line. But you will get the brunt of customer displeasure [with higher prices],” she added.
Educating staff as to why prices may increase would be key, she explained, in order that they can inform the customers appropriately about the knock-on effects of such weather conditions.
“A customer searching out high quality food is going to be upset when they see higher prices,” she said.