A small increase now in the price shoppers pay for bacon, sausages and ham will prevent massive price increases in the next six months, a new BPEX report has found.
The report – The Impact of Feed Costs on the English Pig Industry – claims a modest increase of 10p/kg would allow farmers to break even and prevent massive price hikes for consumers in the next six months. In retail terms, this equates to an extra 16-28p in the retail price for a pack of pork chops, 6-12p on sausages and 7-14p on bacon.
The current cost of production is estimated to be £1.70/kg and the average price paid to farmers is around £1.55/kg resulting in losses of approximately £14 for every finished pig; without price increases, BPEX says the losses for the industry are set to hit £100m over the next six months, forcing many farmers out of business
The levy body estimates the EU pig herd will decline by 8-10% over the next few months which could result in a price increase of around 50p/kg – a recent 4% herd reduction in Germany led to a 26p/kg increase in the price paid to farmers.
As a result, consumers could be forced to pay an extra £1.40 for a pack of four pork chops, £2.50 on a leg roasting joint, 60p for a pack of sausages, 70p on a pack of bacon and 45p on a pack of sandwich ham.
The levy body conducted research with YouGov which suggests consumers support the need for a small increase in the price paid for pork products.
Key findings from the poll*
- 63% agreed it was right that shoppers should pay a little more if farmers’ costs have gone up
- 55% said they would be willing to pay a little more for pork, bacon or sausages which were produced by farmers who meet standards such as Red Tractor
- 69% agreed that supermarkets should continue to support Red Tractor pig farmers and resist switching to supplies of cheaper imports, which could be produced to lower standards
- 68% agreed that supermarkets should pay a little more for pork, bacon, sausages and ham to help Red Tractor pig farmers through the current crisis
* 2010 adults were surveyed online between 21-23 September 2012.
“Cost of production has soared due to big increases in feed cost and yet again pig farmers are facing big losses,” said Andrew Knowles.
“A relatively modest increase of just a few pence now on the retail price would cut farmers’ losses and prevent massive increases to shoppers next year if pig production drops.
“It’s a difficult time to be talking about price increases with many consumers feeling the squeeze, which is why it’s so gratifying to see that consumers appreciate the need for small increases and the majority are happy to pay a little bit more for pork, bacon and ham, produced responsibly by Red Tractor farmers.”