Hog producers are alarmed over the continuous trend of low farm gate prices in light of the significant increases in the cost of production and the lower consumer demand.

“The current situation is unprecedented, and has significantly affected the whole hog industry,” said Albert Lim, Jr., president of the National Federation of Hog Farmers, Inc. (NFHFI).

Lim pointed to the lower consumer demand and the increase in pork importation by meat traders as the primary causes of the industry’s problems – on top of its sufferings due to higher production costs.

He explained that while farm gate prices have gone down significantly, this is not reflected in the pricing at the markets, which also affects the consumers’ buying power.

Farm gate prices currently averages at a high of P82 per kilo and a low of P78 per kilo. Prior to the Holy Week, the average price was between P115 to P117 per kilo.

However, Lim pointed out that pork is still selling in the wet markets at an average of between P150 to P175 per kilo – turning off many consumers who are already suffering from the hike in the prices of basic commodities.

While it is traditional for farm gate prices to go down after the Holy Week, it has not stopped going down. “It did go down, slowly in the beginning, but we did not expect it to continue until now,” Lim said.

Suggested retail price

In a meeting with Agriculture Secretary Arthur Yap, the members of the NFHFI’s Council of Presidents suggested that the Department of Agriculture (DA) come out with an information campaign to inform consumers of the “right” pricing for pork products.

Lim said their suggestion is similar to the “suggested retail price (SRP)” practice of manufacturing companies. The DA can post SRP of pork products outside the wet markets so consumers are aware of the prices of pork and can themselves call the attention of the retailers.

“We have no control over the traders and the retailers, but as consumers, we can tell retailers that they should be selling their products at the right price,” he said. “This way, everyone comes out a winner – consumers get lower prices and will buy more pork and producers can sell more hogs.”

Domino effect

Lim said if the current trend of low farm gate prices is not addressed, it will have a domino effect in the pork production all over the country.

“For a time, we thought that the situation affects only Luzon, but it has already started to affect hog producers from Visayas and Mindanao.”

Since farm gate prices in Luzon have dipped significantly low, traders and meat processors have started to stop shipping pork products from Mindanao, specifically from General Santos City.

Although hogs and pork products from Mindanao saved the day for the tight pork supply in Luzon when it was hit by hog diseases, GenSan is now expected to take a hit since it adds freight cost to the cost of its pork supply.

“Before, we knew that pork prices fluctuate, but this is the first time that we’ve been hit by very, very low farm/live prices,” Lim said.

He added, “This situation is a double whammy for hog producers, especially those who were hit by the swine diseases last year. Now that they have recovered from the effects of the disease, they cannot sell their hogs because of the low farm gate prices and low demand.”

High production cost

Many hog producers are contemplating on shutting down their businesses due to the high cost of production vis-à-vis the low farm gate prices.

The NFHFI President said many hog raisers are complaining and very worried because of the “very low price” as they barely make ends meet due to the increasing cost of production.

The cost of production is currently at an average of P85 to P91 per kilo, compared to the low end of farm gate price pegged at P78 to P83 per kilo.

“How will hog farmers continue in this kind of situation,” Lim said. “Although some commercial producers can continue doing business, take note that about 77% of swine producers are backyard farmers.”

He added that the DA’s latest report noted a significant decrease in hog production for the first six months. “Instead of going down, it should go up especially with the expected demand during the Christmas season.”

 Source: Philippine Department of Agriculture

77% of us are backyard and independant producers,should we go under,WHERE DOES THIS LEAVE THE HOG INDUSTRY AS A WHOLE??as we fight to survive,the feed companies report higher earnings.With talk of a world wide recession on the horizon,looks like a long and hard road ahead for some of us.
My two cents worth.
Michael
Mustang Sally Agri Farms   Region 7

The Department of Agriculture officials have been meeting with hog industry leaders to discuss their concerns over certain issues saddling the livestock subsector, these DA officials said yesterday even as they denied reports of a government ban on meat imports to the Philippines.

Assistant Secretary Salvador Salacup said that, “Bureau of Animal Industry (BAI) officials led by Director Dave Catbagan have already been instructed by Secretary Arthur Yap to directly establish linkages between hog producers and meat processors, to discuss, among other concerns about the domestic supply and pricing of pork items.”

He said plans are being firmed up to link backyard hog growers with meat traders like Philippine Association of Meat Processors, Inc. (PAMPI) and Meat Importers and Traders Association, Inc. (MITA).

DA officials have also been meeting with these groups to discuss the possibility for retailers to adopt a standard retail price, Salacup added.

As for reports of a ban on meat imports, Catbagan made it clear, meanwhile, that there was no such directive issued by the Secretary, adding that Yap had merely asked the DA’s regulatory agencies to review the issuance of import permits for agricultural products as part of the Department’s intensified efforts to curb smuggling.

“There is no ban,” Catbagan said. “The instruction of the Secretary is in view of the alleged rampant smuggling in the hog sector. The secretary instructed the DA regulatory agencies such as the Bureau of Fisheries and Aquatic Resources, Bureau of Plant Industry and BAI to review the issuance of import permits to determine if there are lapses.”

He added that, “There was no instruction to suspend the issuance of import permits or   authority for any particular agricultural   product.”

The DA is stepping up the implementation of several  measures for the hog industry, including feed subsidies, a stock dispersal program, and disease control programs that are being implemented in coordination or collaboration with the local government units.

These programs are meant, he said, to help the sector recover from a growth slump in the first semester, in step with President Arroyo’s goal to energize the farm sector and ensure food sufficiency.

As President Arroyo has sustained her government’s record investments in DA programs to boost productivity, the agriculture sector expanded by a high 4.7% in the first semester of 2008 as against 3.74% in the same period last year.

The crops subsector was the chief growth driver, with palay yields growing by 5.84% to 7.12 million metric tons and corn output by 19.62% to 3.292 million MT.  Sugarcane led the high-value commercial crops with double-digit growth rates at 32.19%, followed by bananas, 20.85%; and pineapples, 11.94%.

However, the livestock subsector contracted 3.33% in the first semester of 2008, with hog production suffering a decline of 4.33% during the period owing to a drop in the number of animals slaughtered in abattoirs, which, in turn, was a result of a swine disease outbreak that had negatively affected production in Central Luzon.

As part of its measures to assist the hog growers, Yap earlier has ordered BAI and the National Meat Inspection Service to finalize plans to complement the meat inspection laboratories set up in General Santos City and Polomolok in South Cotabato.

The DA will also include in its rehabilitation package for the livestock sector animal health programs and laboratory services, Catbagan said.

Catbagan said the DA is now undertaking a massive vaccination program, worth P30 million, against possible Porcine Reproductive and Respiratory Syndrome (PPRS) and other emerging swine diseases, with a focus on the backyard population in Central Luzon and the Calabarzon (Cavite-Laguna-Batangas-Rizal-Quezon) area.

 Source: Philippine Department of Agriculture