New report highlights plight of pig industry

Threats to the British pig industry from rocketing feed costs and almost static prices are likely to continue, says a new independent report.

It predicts production costs could be as high as 180p/kg by 2010, compared with around 140p at present an average of 108p in 2006

'Global feed commodities market its impact on the British pig industry, and risk management strategies to mitigate this' has been commissioned by BPEX with independent contributions from ABN and Barclays.

Feed accounts for almost half the price of producing a pig, and the rising price of feed commodities has caused pig production costs to soar. I

Independent analysis by ABN on current and future commodity price trends shows the cost of producing a kilogram of pig meat is forecast to rise from 108.2p in 2006 (on an annualised basis) in to 148.1p March 2008.

Assuming an average producer price of 115p in 2008, this implies a loss of 30p/kg, which is equivalent to £22 on every pig produced - equivalent to an industry-wide annual loss of £200 million.

Barclays' independent analysis highlights how supply chain collaboration such as fixed price contracts, or sales contracts linked to commodity prices, may help ease the risk faced by pig producers.

BPEX chairman Stewart Houston said: "The report illustrates how the British pig industry remains under threat - without a price of 140p/kg pig producers will continue to suffer unsustainable losses. This will see British pig producers leaving the industry for good.

"The British pig industry is unique, producing pork, bacon and ham to standards of animal welfare which are not regularly matched outside Britain. The loss of the British pig herd will mean consumers lose the choice to buy pork, bacon and ham from a high-welfare, assured supply chain, that deploys sustainable production methods."