Now pigs follow milk into trough of falling prices
First milk, now pigs. The Lees have seen prices and profits
tumble at Dowrich – and there is not a lot they can do
about it. Tim Relf reports
PLUMMETING returns in the pig industry have mobilised farmers into action – among them Anthony Lee.
Anthony, chairman of the Devon and Cornwall NFU pig committee, joined last weeks delegation to London, lobbying MPs and the new farm minister Nick Brown. "We were trying to highlight just how bad the situation is," says Anthony, after returning from his first "on business" visit to Parliament.
Back on the farm, the last week in July saw finished pig values of 75p/kg dw, with further falls expected. Spot pigs, says Anthony, were changing hands for less than 50p/kg lw. "The lowest I can remember."
Only as recently as July 1996, the figure was 153p/kg dw. "I didnt expect that to continue – but alarm bells were ringing when we went under 100p/kg, about the break-even point."
At current levels, with stock in mid-July grossing just £57/apiece, the finished item is now, when the sow is also taken into account, only just paying for its feed. Then there is vet and med, labour, machinery and stock depreciation to take into account, not to mention interest charges. "We are borrowing money in a loss-making situation – a very vicious circle," says Anthony.
Not much scope
Neither is there a lot of scope left to boost returns by improving quality, with nearly 90% of the mid-July batch of 65 head grading Q, the top quality. At 75kg dw, the average fat probe was less than 11mm. "As good as we can hope for."
In a bid to cut costs, the Lees are limiting culling rates and retaining more home-bred stock. With bought-in gilts costing about five times as much as cull sows are making, making replacements is an expensive business. Culls sold last month for 32p/kg dw – compared with 121p/kg in July 1996.
"You cant hang on to them for ever. You need to keep some turnover, or the herd will get too old." But culling is now restricted to those that are poor breeders or have health problems – along with one or two that are too big and clumsy. The farms replacement rate, across the 254 head, is now under 35% – compared with a national average of about 44%.
Replacing boars is another costly job – some sold recently only grossed £45/head. And new ones typically come with a price tag of £450 or more. "Spending has to be monitored but, as with all breeding stock, it is false economy to try and save too much."
The feed bill is also under continual scrutiny – but the best way to get this down, says Anthony, is to get more out of it. And that means better physical performance of the pigs. The target is to lift the 8.75 piglets reared/sow to 9.5. "The more piglets I can get out of each sow, the cheaper the food cost per pig reared."
Lower cereal prices have, all the same, been good news and the Lees have been shopping for good deals. A load of soya was taken recently at £145/t for delivery in 2000 – the furthest forward they have ever bought.
Trouble is, at the moment, there is a time lag before better prices filter through. "Pigs are now getting sold on todays prices, having been fed on the last six months costs."
To bulk up the grain supplies, a 1.8ha (4.5 acre) standing crop of barley was bought from a neighbour for £250/ha (£100/acre). The straw, which came off at a rate of just over 2.5t/ha (1t/acre) will also be useful.
Dowrichs 16ha (40 acres) of Brigadier and Hussar wheat, meanwhile, progresses slowly. July was another wet month, with more than 60mm of rain falling on top of Junes 100mm-plus. Harvest is now pencilled in for the third week of August. "Its gone from the milky stage to cottage cheese and now to cheddar cheese in the space of three weeks," says Anthony.
Cheaper grain will help the Lees ride out the storm in the pig business. Some farmers wont though, says Anthony, and as European supplies fall, so prices should return to nearer break-even by the end of the year.
Its just unfortunate that the rock-bottom pig returns at coming at the same time as disastrous prices for the farms other main enterprise. The one bright spot at the moment is potatoes. "We are a mixed farm and, long term, a mix of enterprises spreads the risk."
For the time being, at least, there are no plans to diversify into sheep. "The only thing I know about them is that they die whenever they get the chance," says Anthony. "Unlike pigs, of course, which annoy you a bit- and then die."
• A 235ha (580-acre) family farm in mid-Devon, run by Anthony Lee, his father Michael and his brothers, Roger and Christopher.
• Dairy herd of 220 Holstein Friesians averaging 5800 litres a year.
• Outdoor pigs reared from 220 sows.
• Potatoes grown on the farm and on rented land.
• Strong emphasis on co-operative marketing.
Sow far, so good…but as pig prices fall, improving the herds physical performance will become ever more important at Dowrich.
Here comes the sun. And about time, too, says Anthony Lee, dressed in wellies and overcoat – this summers typical apparel.