Pig producers feel the pinch as margins tighten during 2024
© Tim Scrivener The gap between on-farm production costs and GB-finished pig prices has closed slightly during the second quarter of 2024, but overall, producers remain in profit.
The full cost of production was estimated at 195p/kg deadweight by the AHDB for the second quarter of the year, up by a penny on the first quarter.
Meanwhile, the EU-spec standard pig price has dropped by just over 3p/kg since the beginning of the year.
See also: China dispute with EU creates turbulent time for pork trade
Jess Corsair, senior economist at AHDB, said slaughter pig margins were estimated at £14.86 a head and 16.74p/kg deadweight.
Ms Corsair said: “Feed costs have also remained consistent with Q1 2024 and make up 62% of total costs in Q2 of 2024.
“Feed costs have been increasing through Q2, which could see a greater impact on cost of production and net margins in the second half of 2024.”
Global pork trade
Pork trade has been fairly subdued in the UK and Europe, but seasonal demand is forecast to help increase consumption throughout the rest of the year, according to Rabobank.
It has also forecast pork supplies to increase slightly during the second half of the 2024 in the EU and US, but tighten across Asia as a result of disease outbreaks.
The antidumping investigation looking at EU pork imports into China has been influencing global markets.
Chenjun Pan, senior animal protein analyst at Rabobank, said: “A suspension of EU exports or high tariffs could mean global pork trade flows are rerouted as China finds new origins and EU exports flow to other regions.
“If EU exporters offer discounts to capture new markets, importing countries may need to support and protect local producers.
“Meanwhile, other exporting countries may find their traditional trade partners shift to cheaper EU pork products.”
Ms Pan added that due to heightened geopolitical tensions, many governments had supported improvements in domestic production to increase self-sufficiency and reduce reliance on imports.