Big group set to give pig producers stronger hand
By Robert Harris
A NEW, giant producer group marketing one-third of the UKs pigs could be up and running this spring.
The aim is to boost producers returns by improving negotiating power with buyers and restoring market stability, says independent facilitator Robin Pooley. "It is really about co-ordination, balancing the market with the right quality and quantity to avoid the catastrophe of recent months.
"Logic demands that the rapid concentration of buying power needs to be matched by sellers," he adds.
"But we cannot expect to squeeze consumers to get more money. We need to do a better marketing job to provide traceable, welfare-friendly pork of the type that the market demands."
The new group provisionally involves 11 producer groups, which currently compete with each other to market 5m pigs a year. This is 30% of the UK total worth £400-500m a year. Another three groups are considering their position.
The new body will consist of a federal of groups, allowing each to maintain its own board and local culture. "This is incredibly important, farmers do not like being part of a huge, distant group," says Mr Pooley, who established leading potato co-op Anglian Produce.
He hopes that a management agreement will be finalised by the end of February. "The producer group could be a reality by March or April. We will need to clear the lines on the monopolies front, but I do not anticipate a problem. We will be no bigger than the largest buyer."
Response from processors and retailers has been encouraging, he claims. "They want stability. One of the biggest processors says this scheme will allow it to compete with the Dutch and the Danes for the first time."
Graham England, NFU pig committee chairman, welcomes the idea of professional marketeers selling pigs. "We do not have the structure to sit around a table and negotiate sensible terms to allow pig farmers to survive. If the price the consumer paid was divided fairly between all parties – retailer, processor and producer – the immediate crisis would be solved."
Grenville Welsh, chief executive of the British Pigs Association, supports the idea but questions the groups chances. "There has not been the co-ordination between the marketing groups, as the recent crisis demonstrates.
"Nor can you insulate the farmer from the European market. I suspect the level of achievement is going to be lower than the level of expectation."
The scheme addresses one of the main weaknesses of the UK pig market, says Stewart Houston, chairman of the British Pig Industry Support Group. "Co-ops are fragmented and jockeying with each other for position. The sooner we start working together, the sooner we can start putting things right."
Max Hilliard, managing director of Malton Bacon, remains neutral. "We are aware of developments, but none of our suppliers have talked to us yet. So it is very difficult to comment."
Other processors were unavailable as FW went to press. *