Pig industry will shrink if prices don’t improve

Pig producers may start to leave the industry if prices do not improve warns, AHDB Pork.

The average pig price has lost about one-third of its value since late 2013, but has fallen rapidly since the end of last year, losing 13p/kg, or about £11 a head in the past 12 weeks.

A glut of pork on the European market, increasing competition for UK pigmeat and falling pork consumption had combined to push down prices, said a report by the levy board.

There were few signs at present that producers were leaving the industry or rationalising their herds, because the falling cost of production had helped to cushion the impact, said the levy board.

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But with pig prices lower than the cost of production, this was likely to change, it said.

This had already been seen across Europe, where the pig breeding herd had contracted by 2%, according to a census in December.

Independent pig consultant Peter Crichton said: “If prices don’t recover in the next three months, then we may see a steep rise in the number of sows culled.”

He estimated that about 10% of pig producers were seriously considering their future and that some were retiring when they might otherwise have brought in a manager to continue the farming business.

He advised producers to talk to their bank and look at efficiencies such as saving money by using a mobile mill and mixer.

Improved efficiencies have increased UK and EU pig production at a time when consumers are turning away from pork.

While the Russian import ban initially flooded the European market, most displaced pork has been sold elsewhere (predominantly to China), but at the expense of value.

On top of this, UK pork producers have had to compete with cheaper European pork when the pound has been strong against the euro. 

EU private storage aid removed 90,000t of pigmeat from the market in January, helping to firm up EU prices, but ended on 27 January after member states (including the UK) voted to close it.

This received heavy criticism from farming groups.

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