Look inward, pig men told
By Simon Wragg
PIG producers should not look to meat buyers to bail the industry out of trouble. Instead, greater co-operation in marketing, input buying and risk management were essential to improve prospects, far mers have been told.
Robin Pooley, chairman of United Pig Marketing, told delegates at last weeks Business Link Suffolks Turning Point conference, Bury St Edmunds, that attitudes must change.
Producers had to accept the plight of the industry was their own problem, he said. "Continued warfare between producers and processors is not an option – it is stupidity."
Further cost savings on units was imperative to stave off competition from imports. If meat prices were not to rise, that meant more co-operation, particularly on sourcing inputs, added Mr Pooley. A hefty 10p/kg saving on costs was achievable if large buying groups were introduced, he argued.
The need to control production costs was growing. Fluctuations in UK pig prices were getting worse. The gap between the bottom and top price of a cycle was doubling every five years, warned independent economist John Strak. By 2004 the gap could be as much as 49p/kg, he predicted.
Farmers must learn to manage risk to survive this change by preparing contingency plans to account for sudden or prolonged moves in input or pig prices, added Dr Strak. Greater co-operation would also help – the Danes had proved that by ensuring farmer-owned businesses held links throughout the food chain. There, fluctuations in average prices were substantially below that seen in the UK, he said.
Other sectors must also look to drive out unnecessary costs. Andrew Saunders, managing director of Britains largest integrated producer/processor, BQP, said the meat sector also needed an overhaul.
Claiming to spend £1.75m annually to pay for meat and vet inspections, promotion levies and red tape for processing pigs from the companys 25,000-sow herd, Mr Saunders said any organisation adding to meat chain costs without increasing end product value should be removed.
While farmers may be encouraged into processing, officials warned them not to expect all developments to generate greater returns. A move to "adding value" would only serve to reduce the % of pigmeat in individual products, weakening demand further.