Agriculture Christmas hams are produced at a loss, and there is no relief – “I can’t pay myself for this”

Phew, the pig sighs and prays curiously on the edge of the pen. The same inch a visitor unaccustomed to the stupid smell of a pigsty.

The host of the meat pork from Honkajoki Antti Pukara, 27, throws pigs to shred local leaf. Going into the pen becomes quite raucous when the pigs shake the leaves in their mouths like dogs do.

“I don’t read them in Malta, but they look closely at the pictures,” Pukara sculpts.

Some pigs have a green stripe on their backs. That means the slaughter car will pick them up the next day.

However, injecting pigs into meat does not fatten Pukara’s account bag. Christmas hams are currently being produced at a loss, as the cost of animal production has risen to unprecedented levels.

“With a big loss,” Pukara points out.

“For myself, I can’t pay for this.”

Antti Pukara is a farmer in Honkajoki in the eighth generation. Pigs have been raised on the farm since the late 1970s.

Pukara is not alone in its situation. The production costs of both animal and plant producers have risen rapidly during the year.

There seems to be a crisis in Finnish agriculture. This time is different because the cause of the crisis is global, says a researcher at the Natural Resources Center (Luke) Olli Niskanen.

The rise in the price of natural gas will have a direct impact on fertilizer production, especially in Europe. Fertilizer prices have risen significantly during the year and their availability has declined. In addition, last year’s harvests have been in many places around the world scarce compared to ever-increasing demand. Geopolitical risks also make the market nervous.

Food is last time it was so expensive in 2011.

Niskanen says that the situation could be bad.

“If the bad news continues, there is a risk even of a global food crisis. The great powers secure access to food and inputs, but rising prices are difficult, especially for developing countries that are dependent on basic foodstuffs such as wheat, ”says Niskanen.

“The main reason for the Arab Spring of 2011 was that there was a shortage of food. Now we are talking about a similar rise in prices. ”

Last summer’s harvest in Finland was also lean. As a result, the grain balance is currently weak. An estimate of barley production and stocks is not sufficient to cover estimated consumption.

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For these reasons, the price of feed grain has more than doubled.

Luke since 2015, has reduced market margins for animal production, ie pork, broiler, eggs, milk and piglet production, which produce piglets for meat fish.

The market margin follows the variation in the price of the product and the cost paid by the producer and is used to assess price risks. It thus shows how much is left to the producer on average after paying variable inputs such as feed and electricity.

Currently, margins are at a record low. The piglet carnation margin is up to 56 euros minus. The margin of the meat box is still 10 euros plus, ie on average one producer will have 10 euros left in the hand. It should cover fixed costs as well as living.

The situation varies from farm to farm. The margins tell you what the situation is in the market right now. If the farm has stocks and a good electricity contract, production can still be on the plus side, Niskanen says.

“The weakest of all are the farms where production is based on purchased feed,” says Niskanen.

Pukara is unable to pay himself a salary, but he says he will get by on little. He pays wages to his employees, but otherwise the development of the farm is frozen.

The young host thinks he will make it this way until the summer. If prices do not change, he will have to feed the animals into debt after the summer.

Pukara cultivates fodder on his own fields, but he buys just over half of the fodder fed to pigs elsewhere. The grain comes from nearby areas, within a radius of ten kilometers. In Finland, domestic feed is mainly used in meat production.

“Barley used to cost about 150 euros per tonne, now it’s almost 300 euros per tonne,” says Pukara.

Antti Pukara is a partner in Honkaporsa, which produces piglets. Piglets are raised in sows to about 30 kg, after which they are introduced into meat pigs to grow. The market margin for pork production has plummeted to a negative during the autumn.

In agricultural production According to Niskanen, investments are often profitable, as modern facilities can increase the welfare of both humans and animals. Sometimes, however, the leaps are too big.

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“We have lived in a time of low interest rates, which means that the costs have been reasonable. However, the inflation trend is big, because the debts are long-term and there are enough risks in the industry, ”says Niskanen.

The agricultural sector has a total debt of about five billion euros, but it is quite concentrated, Niskanen says.

Pukara took over his parents ’pig farm as a result of a generational change seven years ago, at just 20 years old.

He represents the eighth generation on the farm.

As part of his agricultural studies, he made a business plan for the farm, on the basis of which he dared to make major investments. In 2018, the construction of a new pigsty began. There came a modern feeding system and room for 1,100 pigs.

In seven years, Pukara estimates that he has invested about one million euros in the space.

“I’m not easy to choose, yes I know where I’ve left. But such an exceptional situation did not come to mind, ”says Pukara.

Pukaralla there are places for about a couple of thousand pigs. About 8,500 pigs are slaughtered every year. One pig grows at Pukara for about 90 days.

Before, Pukara paid about 45 euros per pig for feed. Now the pig eats for about 80 euros.

“The difference, which is 35 times 8,500, is pretty much money,” Pukara says.

One pig gets 140 euros or about 1.55 euros per kilo. The feed costs and the price of the pork, ie about 60 euros, must be deducted from the price, leaving almost nothing in hand.

According to Pukara’s calculations, he would need an extra 25 euros per pig to cope in these circumstances. The price per kilo should rise to two euros so that fair compensation can also be paid to piglet producers.

“It means to the consumer that one package of 300 grams of minced meat should cost 14 cents more,” Pukara says.

In Europe the price of food has already started to rise.

In Finland, agreements between shops and the food industry are relatively long and inflexible. The producer’s chances of influencing the price he receives are not very good. Therefore, the crisis has not yet been reflected in the consumer’s wallet. Prices under the old contract periods are still valid.

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According to Niskanen, the price of food may soon rise in Finland as well. In his view, the estimates of price increases so far have been cautious.

“Personally, I would say that price pressure in Finland has been underestimated. The rise in costs has been so wild lately that this development must be passed on to prices, ”says Niskanen.

Relief the situation is not visible. The future depends on energy shortages, fertilizer shortages and weather.

If the farms get less fertilizer, the next summer’s harvest in Finland and Europe may be lower than usual. It is still difficult to give an estimate of next year’s harvest.

Pukara predicts that pork production could fall by as much as 30 percent if the situation continues.

“It depends on how favorable the banks are. Do they want to start financing food debt if it is not known if the situation will even change? ”

Antti Pukara gave the pigs chews for plucking on his farm in Honkajoki. Next to Pukara is a dairy farm with 150 cows. With his neighbor, Pukara sometimes does services on both sides, for example, in field work.

Termination Pukara has not yet considered, although that is also a kind of trend.

Last year, there were about 850 pig farms in Finland, compared with more than 6,000 in 1995. Due to efficiency, pork production is increased in kilograms more than twenty years ago.

Consumption of pork in Finland has been declining for years. This year, for the first time, more chicken was consumed than pigs.

Declining demand means a difficult market. For many farms, operations become unprofitable.

Pukara believes that most consumers will continue to want to eat ham. If it is not produced in Finland, it is imported from abroad. Finland is one of the few countries where pigs are allowed to keep their tails and where antibiotics are not pumped to them prophylactically.

If difficult times continue, commitment to pigs is not necessary.

“I’m such a young person that I don’t have to hit my head on the wall until I retire. If this thing doesn’t change in a few years, I’ll pull it down and come up with other jobs. ”

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