17 July 1998

Pigs fail to impress

LITTLE opportunity exists for pig farmers to make money in the year to September 1998, suggests a newly-published report from the University of Exeter, which collected data from more than 300 farmers.

In the middle of last month, for example, finished animals were worth 20% less than the average in the year to Sept 1997. And a smaller drop in feed bills will be insufficient to offset this. The pig price:feed cost ratio -traditionally seen as at break-even when at 7:1 – touched the "unprecedented" low of 5.8:1 early this year.

The forecast follows a period, says the report, in which the widely held perception was of worse profitability than was the case, with "deep and precipitous" price falls seen.

"But the first of the two steep falls was from a level that is without precedent and the second from a level that had regained more than 60% of the earlier fall during the brief period February to June 1997."

Non-contract specialist finishers were the only producers to lose money in the year to Sept 30, 1997, after adverse movements in weaner and store pig prices, relative to finished values. These outfits lost £2.70 on every £100 of output.

At the top end, meanwhile, were contract finishers, who made more than £29 per £100 output.

In the contract sector, breeders and rearers made £19.10 and £9.30 per £100 output, respectively. And in the non-contract sphere, the figures were £4.10 and £3.30 for breeder/finishers and breeders.

It was, says the report, a year of "very modest" profitability, with the average net price at 114p/kg dw. The most successful herds stood out on breeding performance, feed conversion and labour efficiency.

"Differences in individual measures can be quite small, but taken cumulatively they produce important differences in profitability."

lPig Production 1996-97 from Agri-cultural Economics Unit, University of Exeter, Lafrowda House, St Germans Road, Exeter EX4 6TL. £8. &#42

Performance

Top Bottom

third third

Live pigs born a litter 11.1 10.7

Pigs weaned a litter 9.7 9.2

Pigs weaned a

sow a year 21.8 20.0

Litters a sow year 2.24 2.17

% pre-weaning

mortality 12.4 14.0

% sow mortality 3.8 5.6

Cost of feed (£/t) 153 155

Costs per £100 output

Non-contract Contract

finishing finishing

Feed 71.9 n/a

Other var costs 5.3 7.1

Gross margin 22.8 92.9

Labour 12.7 30.1

Other fixed costs 12.8 33.8

Net margin -2.7 29.1