Dealing with a supermarket that values your commitment has provided the reassurance needed for one pig producer to continue investing in his business, despite the increases in input costs.
“You cannot underestimate the impact these price rises have had on my business,” said Jimmy Butler.
Mr Butler, a former Farmers Weekly Pig Farmer of the Year, runs 2000 sows on his Suffolk farm, and finishes almost 650 pigs a week for Waitrose and his own free-range pork enterprise. His contract with Waitrose is reviewed monthly to reflect movements in the market place.
“It (Waitrose) is very aware of the cost of production increases affecting farmers. It’s light years ahead of the competition,” said Mr Butler.
Early next year he is due to re-negotiate contracts with his feed suppliers. Based on current prices, he forecasts a rise in production costs of £12 a head for a pig finished at 75kg deadweight. But many producers do not enjoy such close relationships.
“I know of 10,000 sows in East Anglia that are going to the slaughterhouse. That’s about 4000 pigs a week lost to the market.
What concerns me most are the effects on the associated industries. Falls of this scale will have dire consequences for the abattoirs and the feed mills, as well as the veterinary practices dependent on them. It’s all the fault of the supermarkets, bar one, which don’t care.”
Mr Butler would like to see the retailers introduce cost-of-production-based contracts to stave off further contraction in domestic production, but, he says, they are all scared of moving before the competition.
Suffolk pig producer Jimmy Butler anticipates a £12 a head rise in production costs next year at his 2000-sow unit.