Pork levy holiday proposed as hefty price drop adds pressure

AHDB Pork is proposing a one-month pork levy holiday, subject to ratification by government ministers.

If agreed, the move would be worth approximately £800,000 to the industry, which has suffered another significant weekly price drop as the crisis in the processing sector escalates.

The EU-spec standard pig price (SPP) averaged 154.31p/kg in the week to 18 September, down 2.06p/kg on the previous seven days.

Average prices are now 5.49p/kg below the same week in 2020, although the price is 1.78p above the five-year average, said the AHDB.

The price drop comes as slaughter at British abattoirs fell by 4.3% in a single week, to an estimated 173,200 head.

See also: Advice on establishing a B&B pig agreement

Not only have the numbers processed dropped, but carcass weights have increased significantly as pigs back up on farms.

AHDB livestock analyst Hannah Clarke said carcass weights were 800g heavier than the previous week, averaging 89.7kg, and 3.4kg heavier than the same week a year ago.

In the week ending 11 September, the EU-spec all pig price (APP) fell by 1.07p from the week before, averaging 161.66p/kg – 2.69p lower than the same week a year ago, but 5.85p higher than the five-year average.

This means that gap between the APP and SPP has narrowed to 5.29p.

Double pressure

UK prices are coming under pressure on two fronts – the staffing problems facing processors and falling EU prices due to oversupply.

The National Pig Association said the industry desperately needed a quick injection of skilled labour. 

Its Pig Industry Group said the “perfect storm of events’’ was putting untold pressure on individuals, their families and staff.

Backlogs on farm come not only at a time of falling pig prices, but of record production costs resulting from high cereal and protein prices.

Futures markets and commodity risk management online course:

  • Risk management strategies for a more predictable financial performance
  • Educated conversations when collaborating with your advisors
  • Negotiate better prices with your grain merchants

View course