NFUS enters pig farmer row with abattoir

NFU Scotland (NFUS) has entered an ongoing row between Scotland’s largest pig abattoir and farmers who are boycotting the plant over hefty price cuts.

The Covid-19-related discounts are applied at £7.50 a head to all pigs going through the abattoir, run by Pilgrims UK. The cut was imposed after Pilgrims surrendered its licence to export pigmeat to China, following an outbreak of Covid-19 among Brechin abattoir staff in January.

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Initially, Pilgrims imposed a discount of £15 a pig to cover the full value of the lost market. But this was revised to £7.50 a pig after the move caused anger among pig producers, already suffering a dramatic fall in prices over the winter.

However, producers said the revised discount was still unsustainable and boycotted the plant.

Since the start of May, a total of 3,500 pigs a week have been re-routed to small abattoirs elsewhere in Scotland or over the border to the north of England. The move has cut throughput in half at Brechin and forced Pilgrims to reduce operations to just three days a week.

Threat to pig industry

NFUS pig committee chairman Jamie Wyllie said the move by producers was justified because the discounts were threatening the survival of the pig industry north of the border.

While pig prices have improved since the early part of the year, margins have been cut by soaring feed prices, Mr Wyllie said.

With the discount added, producers can’t make a living and farm businesses are collapsing as a result.

His comments were echoed by union president Martin Kennedy in a letter to Pilgrims’ bosses.

“We are calling on Pilgrims to recognise their responsibility to the pig industry and cease penalising farmers through unfair pricing. While there is strong market demand for pigmeat, the pricing structure being operated by Pilgrim’s at Brechin is making it impossible for many of our members to survive,” Mr Kennedy said. 

“We are currently losing about one farmer from the sector each week and, to stop the trickle becoming a flood, we need Brechin to once again be operating at normal levels and paying the same price as other abattoirs,” he insisted.

Mr Kennedy raised concerns for the future of the abattoir itself.

“We are concerned for the future of the abattoir as it needs a critical mass of pigs to process efficiently – we simply won’t have enough pigs left in Scotland to meet this critical mass if the current situation persists,” he warned. 

“This could threaten farm jobs and those at the abattoir, and result in a shortage of ‘Specially Selected Pork’ on shelves,”

‘Drop the Brechin discount’

Andy McGowan, managing director of marketing co-op Scottish Pig Producers, urged Pilgrims to drop the discount which he described as harsh.

Other abattoirs had lost the Chinese market but were not imposing discounts, he said. The Brechin discount was so tough that producers were still able to make more money by selling pigs further afield.

Margins have been better even with additional transport costs incurred by rerouting pigs from areas local to Brechin to the north of England, Mr McGowan said.  

However, he said that an amicable solution with the removal of the discount would be the best solution. The loss of the licence to export to China should have been easily resolved in a matter of weeks with appropriate plant checks after the outbreak, Mr McGowan said.

He suggested that the delay in its reinstatement could be entangled in political disharmony between China and Westminster.

“It doesn’t look like there will be a change any time soon, so the current situation will continue,” Mr McGowan said. However, Pilgrims has not suggested it is about to remove the discount.  

In a prepared statement it said: “The voluntary surrender of the China export licence, under the guidance of Defra at the start of this year, has unfortunately had a devastating financial impact.

“The processing of pigs at the site is loss-making and Pilgrim’s UK has continued to share the burden of these losses with farmers since May.”

Call to extend support package

Instead of removing the discount, a Pilgrims’ spokesman urged NFUS to put pressure on the Scottish government to extend the period covered by a pig farm support package announced in March.

The £715,000 Scottish government aid package was directed at losses incurred by farmers suffering amid low prices. It was targeted at losses made during February and March. 

“Together with Quality Meat Scotland and the Scottish Association of Meat Wholesalers, we have made representations to the Scottish government to call on officials to extend this vital support.

“We are asking NFU Scotland to lend their voices too,” Pilgrims said.

 It added that the reinstatement of the Brechin site’s China licence was key, and the company was doing everything it could to raise the importance of this via Defra and other government departments.