Pig farmers still in red as prices rise

Pig producers face a long road back to profitability as the market finally starts to march upwards.

The average British farmer lost £9 a head in the first quarter of this year, compared with a £4 loss in the last part of 2015, according to AHDB Pork. 

The gap between pig prices and full production costs was negative for the fifth quarter running.

But the market appears to be on the turn, with prices picking up as supply tightens.

The EU-spec standard pigs price rose to 116.27p/kg in the week to 21 May. That meant prices had risen more than 4p/kg in seven weeks.

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The average pig price seems set to hit 120p/kg in the coming week, following increases in the German market. 

But returns remain about 15p/kg lower than the same time last year. 

National Pig Association chairman Richard Lister said the feeling at the recent Pig & Poultry Fair was good — but farmers had faced a difficult time.

“Those people that wanted to exit the industry or have restructured made the decision quite early,” he said. “We think we have lost about 20,000 sows out of the national herd, which is pretty disappointing.

“We are currently off the bottom now with price. We think we are through the other side.”

Improving pig prices have come after numbers have slowed in the last month.

In April supplies were still running high. Slaughterings were up 5% on the year at 893,800 head. Sow slaughterings were up 12% too, as the restructuring of the national herd carried on.

AHDB’s latest forecasts show the pork trade should tighten throughout 2016, making the market more balanced that it has been. UK pigmeat production is still expected to go up 4% this year, but the commission expects EU output to stay flat.

Britain’s breeding herd reached 401,000 head in December, after an unexpected rise. AHDB Pork expects the total to shrink to 390,000 by next winter.