Pig sector has lost £500m since October 2020

Pig farms lost an average of £58 a pig during the first quarter of 2022, taking the sector’s total estimated losses since October 2020 to an eye-watering £500m.

The AHDB has published its latest quarterly figures which show that the full economic cost of production for January to March this year rose to an estimated 207p/kg deadweight, largely because of changes in feed, fuel, energy and borrowing costs.

The figures compare with an estimated loss of £39 a pig in the final quarter of 2021, when the cost of production was estimated to be 193p/kg.

See also: AHDB pig costs of production figures show massive losses

The last time the AHDB estimates showed that pig farmers were making a positive net margin was between July and September 2020.

The AHDB has also pointed out that because feed costs have continued to rise over recent weeks, the average for the first three months of this year masks the detail that by the end of March the estimated cost of production had reached 216p/kg and by April was 230p/kg.

By contrast, the EU-spec standard pig price (SPP) and all pig price (APP) have failed to keep pace with the impact of these increasing input costs.

In the week ending 30 April the SPP was at 166.8p/kg, a rise of almost 2p/kg.

Sobering figures

The National Pig Association (NPA) said the sobering figures highlighted the desperate need for a rapid increase in the pig price.

It said the cost increases were predominantly driven by the hike in feed costs, up from an estimated 134p/kg in the final quarter of 2021 to 148p/kg in January to March this year, with feed now accounting for 71% of total costs.

Historically, feed typically represents about 60% of the total cost of producing a kilogram of pork, and in January to March 2020 was just 90p/kg.

With producers facing such huge losses, the NPA has welcomed the commitment of retailers that have invested in increasing the producer pig price, including Aldi, Asda, the Co-op, M&S, Morrisons, Sainsbury’s and Waitrose.

But it has recently written an open letter to Tesco urging Britain’s biggest retailer to do more to protect its future supplies of pork.

A recent survey found that four in every five pig producers could go out of business within a year unless their financial situation improves.