UK pig industry calls for transparent pricing
The UK pig industry has called on Europe for more transparent pricing mechanisms and robust contractual requirements in a bid to help producers suffering losses of up to £14 a pig.
Organisations representing UK pig producers – NFU Scotland, the Ulster Farmers’ Union and the National Pig Association – have written to European commissioners asking them to use the progress in the dairy sector at EU level as a model to deliver a more sustainable and balanced pigmeat supply chain.
“Agriculture within Europe has already had to absorb the initial shocks of increased costs within the livestock sector without significant recompense from the market. No sector is more vulnerable to input feed costs than pig production,” the letter reads.
“The EU has reviewed the operation of the milk market in Europe and intervened with new contractual standards and vehicles to empower producers. It is now imperative that a similar initiative is fast-tracked to underpin the EU pig sector.”
Cost pressures on energy and protein feed sources were a challenge to EU pig production, and following the European stalls and tethers ban on 1 January 2013, significant investment had been made on many farms to meet the welfare legislation.
“In the present economic climate, producers face a perfect storm of cost escalation with no shelter from the competition of lower welfare systems and no significant support from the market,” said the letter.
“In recent weeks, in all parts of the United Kingdom, we have already lost producers and capacity in an industry that has, for many years, operated high-welfare production systems.”
According to the letter the market had failed to react to the true costs of production over a prolonged period, and it was essential now that transparent price reporting was in place across Europe and bolt-on premia were not sheltered from the reporting mechanism.
The organisations said premiums were often not reflected in average price reporting, which meant actual prices were underreported and weekly prices, which are based on reported prices, were lower.
“It is now essential that there are options for producers supplying the larger buyers or processors. It is not acceptable that animals are traded on a weekly offer price alone; there should be an option to supply through a contract, the price being defined by an agreed transparent pricing mechanism,” the letter read.
“Agreed pricing mechanisms can also be subject to a multiplier when key inputs rise. This form of sustainability coefficient might be triggered at certain price thresholds as agreed by producer groups and processors. However, the EU should investigate the viability of such an approach, overseen by a trade regulator when feed prices shift significantly and the market fails to respond.”
It was crucial for EU consumers and producers that a sustainable framework was put in place, which supported the production of high-welfare pork within the EU.
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