11 January 1999
Pig processor homes in on big suppliers
By FWi Staff
PIG processor Avonmore Meats has taken radical measures to secure its market position following forecasts of a shortage of pigs towards the end of March.
In a move which indicates that the pig cycle is gradually moving from oversupply towards shortage, Avonmore has decided to buy pigs from fewer but larger suppliers.
Four of the UKs major pig marketing organisations have agreed to become Avonmores sole suppliers under a single contract agreement from 15 February.
The companies involved are BOCM Pauls, Dalgety Livestock Marketing, Meadow Valley Livestock and UPB Porofarm.
Avonmore had previously sourced from 11 groups, as well as buying direct from farms and from the spot market.
The four suppliers will jointly negotiate prices every four weeks, providing increased stability within volatile market conditions, said managing director Martin OKane.
“They will manage all aspects of procurement, ensuring all pigs conform to the FABPigs status,” he said.
The seven groups which have been left out of the new buying agreement will no longer supply Avonmore, but will continue to supply other slaughterhouses.
That could boost competition in the market, which would be good news for producers, said Suffolk-based pig farmer and consultant, Peter Crichton.
“Some 150,000 fewer sows are in the system this year than in 1998, and there will be a significant reduction in supply by the end of March,” he said.
The shortage in pig numbers is also likely to boost prices to farmers, he added, which will give sellers more bargaining power when negotiating with buyers.
“Producers will be helped rather than hindered,” said Mr Crichton.
Avonmore presently slaughters 14,000 pigs a week, of which about 8000 are from the four suppliers which will soon become the companys sole source of pigmeat.
The Midlands-based group hopes the move will enable it to increase processing to up to 20,000 pigs a week.