Pig producers face still higher feed costs

Pig producers are are facing worsening cost pressure as sharp rises in the price of feed ingredients continue.

Ex farm feed wheat prices reached £154/t on August 31, compared with £79.10/t twelve months earlier. Futures prices have continued to rise since then with values of more than £180/t available for November 2007 mevement..

To highlight the problem facing the pig industry as a whole the British Pig Executive (BPEX) has published its Feed Costs Report.

This provides proof to retailers and consumers that higher pigmeat prices must be paid if many pig units are to remain viable within the supply chain.

Although EU pigmeat producers as a whole will be facing similar problems, with the exception of Swedish and Parma ham producers, UK production costs are the highest in Europe.

UK cull sow abattoirs are also reporting that several herds are being culled adding to the post FMD backlog already in the system.

The National Pig Association and the NFU are calling  for meetings with retailers to press for immediate pigmeat price rises.

Although reports are circulating of 7% increases in retail meat prices it is yet unclear if these will be passed back through the supply chain to hard pressed pig producers.

NFU chief economist Carmen Suarez has warned that in the past twenty years food retail prices have increased by over 50% while farm gate prices have stagnated. Over the same period food has become 20% cheaper in real terms.

Pig producers are now facing a near 100% rise in the cost of feed cereals.  Unless these are matched by commensurate increases in pig prices, commentators have warned that many in the industry will be unable to continue.