W2B-025 Christmas - Animal health-1.txt
Profit from progress, message for industry

THE FORMATION of a quality food chain...detailed knowledge of physical and financial performance on-farm...attention to animal welfare and environmental issues... protection of our high animal health status...feed formulation to reach the genetic potential at each growth stage and very close attention to management detail were all outlined as means to ensure the survival of the pig industry in Province, by speakers at the NI Pig Conference, held at Cookstown this week.

The conference, which was organised and sponsored by John Thompson Sons, Elanco Animal Health and NuTec Holdings (Irl) Ltd, attracted a wide audience with all aspects of the industry, from production to processing being represented.
Victor Truesdale, sales director with John Thompson Sons, summing up the wealth of information, said: "Some of the measures outlined are in the control of the individual farmer but others will require industry wide co-operation if they are to be achieved.
"However if we are serious about our industry we have to tackle these issues in a meaningful way."

Industry measures outlined at the conference included the possibility of a quality food chain where all sectors get together to produce a quality product that has consumer confidence, and will attract premium markets. Strict quality control and meaningful financial incentives should be used to maintain such a structure.

A total industry effort will be required to maintain our high animal health status and to find systems that will meet all EU requirements for animal welfare and environmental pollution.

The opportunities for the feed industry and producers to work together to target specific growth stages of the pig were also highlighted.

FINANCING THE ENTERPRISE: Discussing how his bank might react to a request for a substantial loan for a new pig unit on a green field site, Stephen Smith, Agricultural Adviser to the Ulster Bank, pointed out that the pig industry was characterised by fluctuations in profitability, a decline in pig prices in real terms and difficulties in the processing sector.

With this industry image the bank will insist on detailed financial information on the farm to highlight past performance and to draw up a realistic and flexible business plan for the future.

A new unit would have to conform to welfare and environmental disease unit. The extra costs which such measures would entail must all be built into the business plan, plus working capital for the purchase and maintenance of stock until the first animals are sold.

Stephen Smith produced figures to show that the annual cost of repaying the loan plus interest over a 10-year period could vary from £ 22.60 per pig where 17 pigs are sold per sow per year, to £ 16.70 where 23 pigs are sold per sow.

He pointed out that such expenditure is very difficult to justify when it is compared with an average margin over feed for the past five years of £ 15.35, as recorded in John Thompson Sons 'management plan.

He said: "Some other source of capital and/or source of repayment is therefore desirable."

Income from other enterprises can over disruption to cash flow in the early stages, but a high standard of management and a business-like approach are essential in the long term to minimise the effect of repayments.

Farmers could also consider returns from other sources such as sale of breeding stock and selling to specialised outlets.

However, Stephen Smith's viewpoint is that the real hope for the future of the industry is the establishment of a quality food chain where there is feedback of information from the consumer and where the achievement of the standards required command a meaningful premium to ensure loyalty to the chain.

Stephen pointed out that 100 per cent finance is not usually attractive to the banks and farmers could reduce the initial debt by joint ventures. A joint venture with a feed compounder or pig processor could provide some stability in profitability and could also form part of the quality food chain which seems the most likely survival route for the industry.
