Pig producer costs still on a knife-edge
By Peter Crichton
MANY pig units are still operating at a loss, and very few are back in the black in spite of the recent revival in finished pig prices, say analysts.
The effects of PMWS alone have added another 10p-12p/kg deadweight to producers costs.
And although some industry sources had quoted break-even figures of around 85p-90p/kg, many large-scale and efficient producers have found it hard to break even at less than 105p/kg deadweight.
Straw and water alone can add 2-4p/kg to finishing costs, and pig-ration prices have risen by 5-16% over the past 12 months, which is hitting margins hard.
The UK pig market continues to be volatile; some spot abattoirs pulled prices back by 4-6p/kg at the end of last week.
This was partly caused by the recent hike in contract prices, which saw the UK AESA stage one of its largest single week jumps of 4.95p/kg, to propel it to 102.73p/kg deadweight.
But the comparatively static value of the Euro, at 62.4p compared with 63.3p a year ago, is allowing imports to continue to undermine the UK market.
Several major retail buyers have dropped their UK pigmeat bids to match the cheaper imported alternatives.
And the Dutch AEX pigmeat futures continue to reflect an uncertain picture over the next four months, with most quotes between 77p and 80p/kg, well below the UK cost of production.
- Peter Crichton is a Suffolk-based pig farmer offering independent valuation and consultancy services to the UK pig industry