Pig industry faces profitability crisis again

Pig producers are once again facing large losses as a result of high feed prices and low farmgate prices, Bpex has warned.

Prices for wheat and soya, the main ingredients in pig feed, have risen rapidly in recent weeks as a result of adverse weather conditions in South America, the US and the Black Sea region. This has pushed up the cost of production, which has risen faster than DAPP, resulting in what Bpex has described as an “unsustainable position”.

The latest figures from AHDB Market Intelligence, which do not take full account of recent rises in feed prices, reveal that it cost 170p/kg to raise a pig. At present, producers are being paid just 150p/kg.

Senior analyst Stephen Howarth said: “Based on the July cost of production estimate, this means that producers are losing an average of 23p/kg, equivalent to a loss of about £18 per pig.

“In recent months, feed costs have risen faster than the DAPP, increasing the losses experienced by producers.

“Producers have now been in a loss-making position for 22 consecutive months, dating back to October 2010. Cumulative losses during this period are now approaching £200m.”

Bpex has now published a report on the crisis, which is available to download at: http://www.bpex.org.uk/prices-facts-figures/reports/FeedReports.aspx  

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