By Simon Wragg
PIG producers face mounting feed bills following fresh swine fever outbreaks in Norfolk and Suffolk this week.
Most producers are carrying 6-8 weeks credit and that will have to be increased by at least another month for those in affected areas, warns the National Pig Associations Ian Campbell.
The problem we have is some farms were coming out of restrictions but new outbreaks mean they cannot move stock for a further 30 days.
The NPA suggests that about 1000 farms may be affected. That figure, combined with an estimated feed bill of 16,500/month for a 400-sow weaner-to-finisher herd, could put extra lending by feed firms into millions of pounds.
Trade body UKASTAs chief Jim Reed has written to farms minister Nick Brown stating that suppliers do not want to add to welfare problems by ending feed deliveries to unsecured borrowers, but firms will have no choice but to protect their own financial security.
But some feed suppliers say they will stick by producers. North-east based Fishers Group managing director Chris Peck says the amount of working capital tied up in the sector is more than wed like but was essential for those with a long term view.
I think all businesses in the sector are prudently making extra provision for bad debt, he says. However, the company expects many debtors to come good eventually.
BOCM Pauls takes a slightly different stance. Debt provision has not increased, but auditors are working to a strict tolerance based on the overall level of credit, says the companys national credit manager Richard Dean.
Additional borrowing will be considered where banks are in agreement. If not, we will look at cases but have to consider ourselves as an unsecured creditor.