One in five pig farms lost money in 2013-14

Pig producers will have faced severe pressure on their margins in the past 12 months, despite incomes rising considerably in 2013-14.

An annual report from Askham Bryan’s Rural Business Research unit showed English pig farm incomes rose by an average of 56% in the 2013-14 financial year.

The average farm business income (FBI) – the return to all unpaid labour or on shareholders’ capital – was £65,216.

See also: Administrators in at Yorkshire pig business

But there was still a big gap between the top- and bottom-performing units, with the best 25% earning an FBI of £197,661 and the worst 25% losing £16,046.

Just over one-fifth of farms in the survey had a negative FBI, though this was an improvement of 23% on 2012-13.

The report’s authors, Mervyn Lewis and Sarah Pick, said the 2013-14 financial year benefited from strong pig prices and falling feed values.

But pig prices have fallen dramatically since the middle of 2014 and the average EU price hit its lowest point since 2011.

Last week the British standard pig price crept up 0.3p/kg to 131.85p/kg, though this was still almost 32p/kg down on the year.

“Unfortunately, industry reports have suggested these prices will remain until there is an improvement in consumer demand for pork and therefore it is expected that in the 2014-15 financial year profits will be down on 2013-14,” the report said.

The data covers businesses with a year-end between 31 December 2013 and 31 March 2014. The sample contained 75 specialist pig farms.

Figures also showed a range of performance depending on the size of the unit. Medium-sized farms earned less than small and large ones on average.

FBI on middling units was £22,289, compared with £24,612 on smaller and £215,910 on bigger ones.

“It could be that the smallest farms are family businesses that are able to keep costs down, whereas medium-sized farms, even though they have a considerably larger output, are unable to keep control of both variable and fixed costs,” the pig production report said.

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