Further pig contracts at risk as sector struggles with backlogs

Several major processors have served notice to pig producers, either terminating contracts or asking them to provide fewer pigs, as the industry struggles to tackle a growing backlog of pigs on farm.

UK abattoirs are already operating at maximum capacity, leaving producers, which have been served notice, facing an uncertain future with very few other firms currently offering contracts.

National Pig Association chief executive Lizzie Wilson said the sector was going through a difficult period with a “bleak outlook” and an “obvious supply and demand imbalance”, during a panel discussion at the British Pig & Poultry Fair in Birmingham last week.

See also: Morrisons’ abattoir serves notice to pig producers

“We have quite a lot of pigs on farms, but not the capacity to get them slaughtered and processed.”

Ms Wilson said that at the start of the year, the industry was expecting things to have improved by February or March, but five months later things still hadn’t improved.

She added that pig prices were falling, while input prices and costs of production were rising.

AHDB figures show the EU-spec standard pig price (SPP) has fallen by almost 10% since the start of the year to 178p/kg, putting it roughly 14p/kg below the latest cost of production estimates, and leaving many producers in a loss-making position.

Major processor Pilgrim’s Europe has increased the number of Saturdays they are killing pigs and increased daily pig throughputs, in an attempt to reduce the backlogs.

Pilgrim’s Europe agriculture director Fabio Brancher said: “Last week, we killed a record 48,000 pigs, normally we are killing around 43,000.

“We are trying to reduce the number of pigs left in the field and reduce all the pressure we are having here in the UK.”

Independent pig producers

Independent pig producers are under particular strain, with little interest from buyers and prices being offered considerably below the SPP.

NFU Scotland (NFUS) has warned that the pig sector is under severe and sustained pressure and falling pig numbers could put the sector’s long-term production capacity at risk.

It estimates that many businesses are now running at losses of between £700 and £1,000 a sow, and that Scotland has lost roughly 10% of its sow herd since the start of the year.

NFUS president Andrew Connon said: “The sector is now at a critical point. Without urgent action on pricing, fairness and market structure, Scotland risks irreversible loss of production capacity.

“NFU Scotland will continue to press for immediate action and long-term solutions to secure a sustainable future.”

Pig producers in Northern Ireland are also under pressure.

The Ulster Farmers’ Union says that while there is no significant backlog in the country, producers are still having contracts terminated, and the market remains challenging.

UFU deputy president Clement Lynch said: “Many pig farmers have been put on the back foot and many still face significant uncertainty.

“Farmers are already under immense pressure from rising feed and fuel costs, and they need to know what the future holds for them so they can plan accordingly.”