26 February 1999

Debate over speed of pig prices rising

PIGS could be back in profit within the next few weeks, says Northampton auctioneer Mike Carter.

He expects prices to hit break-even within two or three weeks. And, as supplies tighten, further rises could take them to 100p/kg lw or higher by mid-summer.

His comments come as the national average at marts rose again on Monday, this time up 2p to more than 56p/kg lw.

A 30kg weaner, which may have been worth little more than £5 at last years low point, can now make nearer £30, reflecting the shortage after big numbers of farmers have ceased production.

"A lot of people have been squeezed out or thrown the towel in. We have seen ups and downs over the past 30 years – but never a depression as bad as this," says Mr Carter.

Regardless of how quickly the trade rises, yet more could be forced out as banks foreclose once asset values increase.

"For those who stay in, it will take at least a year of really high prices for a lot of farmers to earn back what they have lost," he says.

But Nigel Rowe, NFU pig committee vice chairman, reckons its unlikely that breakeven will be hit in March. "Its extremely optimistic to think that," he says. Levels will rise, he says, but lower values on the Continent will limit the rate of upturn.

"There is now light at the end of the tunnel," says North Yorks-based adviser Mark Caley. "Those that have managed to stick in the business deserve a better price."

Too rapid an upturn, however, could be damaging. "We dont want to go from a very negative to a very positive situation too quickly. We want gradual price rises that are more sustainable rather than the boom and bust cycle."

Production elsewhere will limit the increase, reckons Mr Caley. "Domestically, we will be under production, but European and worldwide, there is plenty of meat."

More farmers, meanwhile, are on the brink of leaving the business. "They have had such a belting," says Mr Caley. "Other sectors of farming have a backdrop of support. Pig producers have had no help and have taken it on the chin."

A recent British Pig Association survey suggests 30% of UK production could be lost if prices do not return to breakeven by June. And, in addition to the 400 farm-level jobs lost in the last six months of 1998, another 3400 could go if this is the case. There are also the "upstream and downstream" losses, warns the BPA. &#42