Cranswick half-year profits soar

Meat processor Cranswick has posted a 31% increase in half-yearly profits to almost £61m. The Hull-based company exports pigmeat and supplies chicken and pork products to British retailers.  

Figures for the six months to 26 September show adjusted profit before tax was £60.7m – up 30.8% on the same period in 2019.

The increase was achieved off a hike in revenues from £770m in 2019 to £932m in 2020, a £162m, or 21%, increase.

Of this total, fresh pork revenue, which accounts for 31% of the total, increased by 6.9%. Convenience product sales made up 39% of revenue and rose by 21.5%. This category includes cooked meats and continental products.

See also: Expert guide to feed and water requirements for weaners

The lockdown saw a rise in sales through Cranswick’s retail customer base as restaurants closed and consumers switched to meals at home. The effect of African Swine Fever in the Far East also contributed.

Exports to China which account for 10% of revenue were up by 24.8% as buyers purchased large volumes of pigmeat to replace supplies from the country’s depleted herd.

Export performance was further bolstered in the final weeks of the period as exports from Germany were halted following the discovery of ASF in wild boar.

Sustained output was achieved despite disruption at the firm’s plant in Ballymena, Northern Ireland, which was closed for two weeks in August after a Covid-19 outbreak among workers.

The company said demand was exceptionally robust across all categories, reflecting the shift towards greater in-home consumption.

There was a strong contribution from the firm’s new  poultry facility in Eye, Suffolk, during the period, and it is investing £20m in a new cooked bacon facility in Hull.

Brexit preparations were well advanced across all areas of the business, said a Cranswick statement.

National Pig Association chief executive Zoe Davies welcomed the improved profits and export performance.

“There is no doubt it has helped keep the UK pig price higher than it might otherwise have been over these past few months and, hopefully, it will continue to do so,” Dr Davies said.

She also praised Cranswick for keeping production moving at plants despite the extra problems caused by Covid-19.  

Pig prices

However, pig prices for the week ending 21 November showed a further slight slip as the ongoing export ban on Germany pushes more product on to the EU market.

AHDB figures showed the EU-spec SPP slipped by 0.16p to average 153.89p/kg in the week ending 21 November. The measure is now 4.72p/kg below a year ago.

Increased home production has also weakened prices, with carcass weights for the week sitting 3kg above last year’s. However, estimated throughput at British abattoirs during the week was down on the previous week by 7,700 head to 178,200 head and down 10,000 head on the five-year average.

This was due to Covid-19 which continued to affect staffing at processing plants.

Global supply

The United States Department of Agriculture (USDA) has forecast production in China will grow by 9% in 2021 as sow herds are rebuilt following the ASF crisis in the country.

If the USDA forecast were to materialise, although import demand will remain higher than usual in the near term, China’s pork imports would fall by 6% to 4.5m tonnes in 2021.

This would put an estimated 300,000t of product back onto the world market, the AHDB said.