English pig producers lost £27m in the final quarter of 2010 as soaring feed costs met a fall in average prices, BPEX has revealed.
The combined loss means producers are now losing an average of £21.30 on every pig produced, with little sign of conditions improving.
BPEX estimates the average cost of production for pig farmers has jumped 16% as a direct result of the sharp rise in feed costs since last year, while at the same time the average deadweight price paid to producers has fallen 4%.
The DAPP ended last year at 137p/kg, 1p/kg lower than it began the year and 10p lower than the June peak. There has been little recovery so far in 2011, with prices last week averaging 138p/kg, still a penny below the same time last year.
“The further irony for pig producers is that not only are sales of pork and pork products up, the retail prices of the average pork price basket rose consistently from September to Christmas,” said BPEX. “Producers are becoming increasingly agitated at what they see as retailers and processors making profits while they suffer mounting losses.”
In response, a nationwide campaign will be re-run next month to make the public aware of the problems faced by the sector.
The original Pigs Are Worth It campaign, which ran in 2007/08, will be officially relaunched as Pigs Are Still Worth It next month with banners being erected in farmers’ fields next to major transport routes. Farmers are also thought to be organising activity in central London and other locations.
BPEX has proposed a three-point plan to resolve the current crisis and called on retailers to:
• Increase the amount paid per pig to producers
• Support English high-welfare pig meat production
• Adopt total supply chain co-operation
It says the feed cost problem affects producers across Europe, and many on the Continent also face added cost pressure as welfare legislation comes more into line with the UK by the end of next year.
“This is likely to add cost to production in those countries, restrict the supply of cheap imports to the UK and place greater importance on supply chain co-operation if retailers are to ensure the supply of quality, farm-assured product.”
Heavy producer losses because of falling pig prices and the dramatic rise in feed costs were on the agenda for an EU farm ministers meeting yesterday (24 January).
Find out more about the Pigs Are Still Worth It campaign by clicking here.