Pig producer confidence down after European price collapse

Most pig producers are planning to maintain their current set-up rather than expand their businesses, according to a survey.

Bpex’s latest survey found 39% of farmers were confident about the industry’s future than last year, compared with 24% feeling more optimistic and 37% having the same opinion.

The mood among farmers will have taken a hefty knock in the past 12 months, as pig prices have collapsed across Europe.

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High production, falling consumer sales and Russia’s ban on Western food imports caused the average EU pig price to slide 41% to 97.43p/kg between September and the end of January.

This pulled the GB standard pig price from 164p/kg at the start of June 2014 to 132.64p/kg last week. Feed values have not fallen enough to protect farmers’ profits.

Bpex head of technical Andrew Knowles said it had been encouraging to see improvements in both production and processing when farmers’ margins were more positive.

But the survey found producers were being put off from expanding their businesses by a lack of return on investment, a shortage of internal finance and uncertainty about demand. However, competitiveness against European pig farmers should remain roughly the same over the next year.

“While recognising the environment of austerity and tough competitive challenges for all elements of the supply chain, we need to ensure short-term thinking doesn’t undermine the long-term progress that has been made and the sustainability,” Mr Knowles said.

For the survey, Bpex quizzed 650 producers, processors, vets and members of allied industries in January and February.

Confidence among non-producers was far higher than among the farmers themselves, and was stable compared with last year. In the research, 29% said they were more confident about the year ahead.