1 September 2000

Report shows slight upturn for industry

PIG industry prospects are less bleak than the immediate past, though the sustained financial damage suffered since August 1997 means more businesses will close down.

The industrys structure will never be the same again, says Andrew Sheppard, of Exeter Universitys Agricultural Economics Unit. The days when units of 100 indoor sows or 1000 fattening pigs were viable and commonplace have probably gone. In a recent report*, Mr Sheppard records the details of the pain suffered during 1998/99 when prices were below most producers cost of production. Many went out of business, but a reduction of over 500,000 pigs in the UK herd failed to improve prices because of plentiful imports.

But feed costs fell by 11%, bringing the total reduction over the three years 1997-1999 to 23%. Other costs were lower too, probably because the less efficient had been forced out. Bigger herds made more efficient use of labour and achieved better breeding performance. Losses were smaller than in the previous year, and top third herds made profits.

"At 1998/99 prices and levels of production efficiency, the cost of breeding and finishing cutter/ bacon pigs on top-third farms was 75p/kg deadweight. In as much as the future of the industry lies with many of the top-third herds, their production cost might seem to be a glimpse of the future. If pigmeat can be produced profitably at price levels not much above that, the future for those who remain in the industry remains relatively secure," Mr Sheppard concludes.

*Pig Production 1998/99. £8 from Exeter University Agricultural Economics Unit. 01392 263836. &#42