Regional

Pork pitfalls

Researchers lament plunging pork prices

BY CONRAD HAMILTON Sunday Observer senior reporter hamiltonc@jamaicaobserver.com

Sunday, February 24, 2013    

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MANY of the country's pig farmers are virtually wasting their time rearing the porkers as profit margins continue to dip, according to current research on the local swine industry.

The high price of feed, the high mortality rate among pre-weaners, and the inadequate conversion of pork into differentiated products have been highlighted as some of the major challenges in the agricultural subsector.

However, the researchers say it still has the potential to contribute meaningfully to community and national development if certain key improvements take place.

The findings of the World Bank-funded research conducted on behalf of the Jamaica Social Investment Fund (JSIF) by local firm Trevor Hamilton and Associates, comes at a time when Jamaicans are being encouraged to pursue agricultural ventures as part of efforts to reposition the ailing economy.

The report also comes just months after the Jamaica Pig Farmers Association declared that its members were unable to find a market for their produce.

In December, the association complained that the price that was being offered for locally produced pork was too low, causing some farmers to be operating at a loss.

"The farming business models are low value and price sensitive oriented. Therefore, farmers' fiscal viability is under threat. For example, approximately 69 per cent of the meat is sold to the fresh market, which is extremely price sensitive. Farmers estimate that the J$3.07 per kg farm gate price represents 94 per cent of their operating costs," the report stated, indicating that profit margins in the primary segment of the industry were just 6.5 per cent.

The researchers are of the view that those margins should be about 12.5 per cent, which could be achieved with added investment.

The researchers say pork production currently contributes 1.36 per cent to Jamaica's Gross Domestic Product, but could move to 2.38 per cent with its potential to employ as many as 18,000 people, instead of the fewer than 6,000 now engaged in pig farming.

"Globally, export of pork products represent 5.2 per cent of production. It is therefore reasonable to expect the Jamaican industry to perform at this level, especially since it has the captive CARICOM market, which is a major importer, and the fact that Jamaica is world renowned for its jerked pork," the report noted as it encouraged local farmers to explore the production and export of value-added pork products.

"Processing and packaging accounts for 13.8 per cent of value in the USA, where the industry is highly integrated, while in Jamaica, it is 6.1," the report pointed out.

The researchers in their findings also repeated concerns raised last year by local pig rearers who complained about the large quantities of pork products, such as pigs' tail and bacon that are being imported.

The researchers also said that the volume of imported pork products remains way too high at 27 per cent of the total amount of pork consumed. This, the report says, is far too much competition when compared with global standards of under six per cent.

The report also indicated that despite government entreaties over the past two years, Jamaicans are eating less pork.

Pork consumption as a percentage of total meat consumption in Jamaica is just six per cent and decreasing, compared to I0 per cent in the United States.

The researchers also recommend that a well-infused veterinary service for technical support and a credit system for investing in improved pig-rearing facilities should also lead to improvements in the subsector, which, despite its challenges, saw the local pig population moving from 142,000 in 2003 to 145,000 in 2012.

When contacted for a comment on the research findings, president of the Jamaica Pig Farmers Association Angella Bardowell disclosed that the association would be receiving the details at a meeting with representatives of the research firm planned for Tuesday.

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