Pig buyers set to cut and run?

By Peter Crichton

THE pig industry is rife with rumours that several large-scale pig buyers are keen to cut their losses and run for cover.

BOCM Pauls, believed to be the largest compounders in the pig breeding and rearing game, has served 6 months notice on many of its weaner suppliers, who have been told their pigs are no longer required.

The Bibby offshoot, BQP, has also slashed the rate paid to its pig-breeding, nursery and finishing unit operators by up to 20%.

Producers fear that the combined effect of this could filter down to fattening unit operators and result in the termination of many more contracts.

BOCM Pauls staff refused to speculate on the future of the company. But trade sources believe that Elementis, BOCM Pauls parent company, will slim down the group and then seek a buyer.

If that happens, the streamlined group is likely to consist of the core of BOCM Pauls own sow herds. However, with prices at current rock-bottom levels, it is hard to see how a management buy-out – or indeed a purchase by former boss George Paul – is unlikely to go through other than at a bargain basement price.

BQP, which is the only fully vertically integrated operator in the UK, says it is heavily committed to the industry. The company runs its own feed mills and the majority of the breeding herds that provide the progeny pigs reared through BQPs run nursery and finishing units.

Most analysts believe that BQP, which has the backing of Cereal Industries and is committed to outdoor production and welfare-friendly fattening systems, is better equipped than many of its competitors to survive the slump in the pig sector.

But other large-scale pig scheme organisations have been forced to cut their prices. Haulage contractors, too, are being asked to cut their rates in order to spread losses. Unless there is a rapid turnaround in pig prices, many fear that several of the former “Boss Hogs” in the industry could actually go under.

That would have a huge knock-on effect on producers, who have derived a secure income by supplying the large-scale buyers, but who lack the necessary capital to go back into business on their own.

Peter Crichton is a Suffolk-based pig farmer offering independent valuation and consultancy services to the UK pig industry

See more