Producers face revenue squeeze

STATIC PIG prices are raising the pressure on hard-hit farm incomes.

Mixed farm incomes are expected to fall slightly in 2004, according to the latest DEFRA figures, and pig farm incomes have risen by less than 5% since 2000/01.

Pig producers have been struggling in the absence of any significant improvement in pig prices since the late 1990s.

The Average All Pigs Monitor Price (AAPP), which has since been replaced by the Deadweight Adjusted Pig Price (DAPP), has remained largely static over the past five years.

The 2000-2004 five year AAPP/DAPP average of 98.22p/kg compares with a ten year average of 101.5p/kg.

Average UK weekly pig slaughter numbers over the same period have fallen sharply.

According to the Meat and Livestock Commission, an average 260,000 finished pigs were slaughtered each week in 2000, compared with a forecast 176,000 head in 2004.

Imports have continued to fill the gap left by shrinking domestic production, despite a narrowing of the differential between UK and EU prices.

The EU mainland average pig price this week of 94.5p is only 6% behind UK prices with the DAPP currently quoted at 99.97p.

The MLC consultancy service Agrosoft estimate that the average cost of production for a 73kg deadweight pig is 97p/kg.

Unless there is a significant improvement in finished pig prices in 2005 producers will be hard pressed to match cost of production levels.