Business

UK pig producers finally making money

Thursday 27 June 2013 13:30
Pig closeup

Pig producers are finally in the black again, after nearly three years of making a loss.

The improvement is down to lower costs, according to provisional estimates from AHDB.

Estimates for recent months have been revised upwards, taking into account new data on the effect of poor weather earlier in the year on herd productivity.

Average costs in June were 3p lower than revised estimates for the month before, at just over 164p/kg, but still more than 6p/kg higher than they were in June 2012.

"With the DAPP passing this level at the end of May and heading higher still in June, producers stand to make a significant positive margin for the first time since the autumn of 2010," said Stephen Howarth, senior analyst at BPEX.

The deadweight average pig price (DAPP) for the week ending 22 June reached 167.44p/kg - a penny higher than the week before, and 17p higher on the year.

"The firm DAPP was mainly a result of strong demand for British pigmeat coupled with tightening pig numbers across Europe," said Mr Howarth.

"Nevertheless, costs will need to remain low relative to prices for a sustained period if producers are to recover the losses suffered in recent years," he added.

This comes as pork exports strengthen, with April shipments 22% up on the year.

China has become the leading destination for UK exports, buying 16% of the total - increasingly primal cuts and fifth quarter products.

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