Price gap sparks national pig contract calls

By Peter Crichton

A GLANCE at the way the farmgate-to-retail gap has shrunk from 269% at the start of the year to 214% in May flags up the problems facing the slaughtering sector in the supply chain.

Producers are also being offered a tempting range of contract opportunities by some of the larger abattoirs looking to secure their throughput as supplies dwindle.

The latest Malton contracts on the table include a 50% fixed and 50% AESA related floating option with the fixed element pegged at 100p/kg for the next 24 months.

Contract weights are also creeping up and heading towards Dutch and German levels of 85kg and 90kg in the case of gilts.

These semi-fixed price arrangements allow breeder-finishers with known cost of production figures to “lock in” to a profit plus return and the opportunity to try and fix their feed supplies on a similar basis.

There are also calls for a “National Pig Contract” to be drawn up which will tie buyer and seller into a standard form of contract that is legally enforceable both ways.

The NPA has been approached to see if it is prepared to front this arrangement, and it will then be left to individual to use this contract document as a template and insert the pricing, grading and other terms as negotiated with the abattoir concerned.

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