Pig prices mask scale of producer losses as costs rise

Pig producers faced mounting losses despite a slight recovery in prices, with wide variations in contract values and reduced slaughter capacity expected to add to pressure in the run up to Christmas.

British pig prices edged higher in September but remained 11-13% below the same period last year, while rising feed, fuel and borrowing costs continued to squeeze margins.

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Matthew Banks, technical and sustainability director at Meadow Quality, said a wide range of prices meant official figures did not reflect the reality for some.

“We are seeing a two- or three-tier pricing system – something I have never experienced before, and the official figures are not a fair reflection of the true prices many producers are receiving,” he said.

Spot prices range from 105p/kg to 190p/kg, with independent farmers likely to have experienced even greater variation, Mr Banks added.

Lizzie Wilson, chief executive of the National Pig Association, agreed there was a lack of transparency in the distribution of prices.

“Some producers are on contracts that include cost of production and might be paid over 200p/kg, but equally there are contracts with a market price element that could be as low as 105p/kg.

“The Standard Pig Price is an average of those, so the price received depends on the contract, but there are producers haemorrhaging money per pig,” she said.

Despite wide differences between producers, Mr Banks said the £36 a head loss recently modelled by Quality Meat Scotland (QMS) for the third quarter of 2026 was a reasonable reflection of the wider industry’s experience.

QMS’s figures highlighted the pressure on margins as higher input costs coincide with prices well below year-earlier levels. Feed accounted for at least 60% of pig production costs.

Domestic production

The squeeze coincided with increased domestic production.

British prime pig slaughterings rose by 4% in the first eight months of the year, while UK pork production increased by about 5%.

Exports rose by 30% between January and July to 97,100t, but the average export price for fresh boneless pork sold to the EU fell by 23%.

Ms Wilson said Scottish sow cullings had increased, but England had not seen the same trend because low prices had made it financially unviable for some producers to cull their breeding animals.

“Some producers should be making these business decisions if they have been given notice but they are not, so sow cullings are not as high as they should be,” she said.

The outlook for Christmas was also challenging, with abattoirs expected to reduce slaughter numbers, operate shorter weeks and face reduced capacity, followed by the usual post-Christmas lull.

“The situation is very serious; every producer has been given notice on their period of supply which is unprecedented, we have never experienced this before,” Ms Wilson said.

Mr Banks warned that depressed prices could persist well into the new year, although he anticipated more encouraging values after Easter.

Despite the immediate pressures, Ms Wilson said the industry had weathered previous market cycles and remained resilient.

She expected conditions to improve during the second quarter of 2027, when producers could be in a more comfortable financial position.