Pig sector calls for ‘desperately-needed’ price increases as costs climb

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The pig sector has again called for ‘desperately-needed’ price increases as production costs for producers rose even further last month.

The average cost of production for pig producers reached 240p per kg in May, up 10p from the April figure as costs continue to soar.

AHDB’s latest estimate compares with 230p/kg for April and the average Q1 figure of 207p/kg, as feed, energy and fuel prices have significantly increased since then.

The National Pig Association (NPA) said the gap between what producers were being paid and what it cost to produce a pig was ‘more apparent than ever’.

Pig farmers have been facing historically high feed costs even before Christmas, which has now been exacerbated by the conflict in Ukraine.

As a result, many producers are suffering significant losses, and some have been forced to close their farms.

AHDB analyst Carol Davis said: “With May feed prices increasing and energy and fuel increases beginning to bite, the full economic cost of production is currently estimated to have reached 240p/kg deadweight in May.

“May compound feed prices have increased further but forward prices, feed ingredient and future grain prices are all indicating that we just might have reached a feed price peak, although this is at an elevated level and this opinion cannot be guaranteed.”

The last few weeks have seen a steady in the wheat price, on the back of discussions about getting more wheat out of Ukraine and other market fundamentals.

AHDB was quoting feed wheat for July at £288 per tonne, compared with a peak of beyond £350 per tonne in mid-May.

The pig price is continuing to rise, with the SPP for the week ending May 28 standing a record 176.73p/kg, up 0.78p from the previous week.

However, the NPA warned that it remained ‘a long way short’ of the soaring costs of production.

The trade body is continuing to call on processors and retailers to do more to shift the pig price further up towards the cost of production.

NPA policy services officer, Lizzie Wilson said: “There is no sign of any further, desperately-needed, significant increases any time soon.

“In addition, there is still a backlog of pigs impacting many producers businesses.

“We need more support, from both government and retailers, if the pig sector is going to survive.”

Retailers have announced some support for the sector. Recently, Waitrose announced a £16m support package, following a £2.8m investment from Sainsbury’s.

And Tesco, the UK’s largest supermarket chain, unveiled it is spending an extra £6.6 million on pig prices.