Producers losing up to £61/pig, as costs soar beyond £2/kg

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Pig producers are currently losing, on average, between £46 and £61 per slaughter pig, with costs of production typically above the £2/kg mark, according to AHDB.

These staggering losses and costs of up to 216p/kg highlight yet again the urgent need for pig prices to rise beyond £2/kg so that producers can get back to break-even point.

The most recent AHDB quarterly cost of production estimation for 2021 Q4 after showed the full economic cost of production had risen to an estimated 193p/kg deadweight, with pig margins per slaughter pig estimated at -£39 per head. This followed average losses of around £25/pig in Q1 and Q2, and lower losses in Q3.

“Since then, energy and feed prices have continued to rise and pig prices have failed to keep pace with the situation, leading to greater loses,” AHDB analyst Carol Davies said.

“Continued (sometimes regionally related) backlogs of pigs on farm, low pig prices compared to cost of production, and increasing input prices, are resulting in very difficult decisions for many pig producers due to their need to continue managing their business risks and their business cashflow.

“Some producers have already decided to either significantly reduce stock or stop pig production. This will be driven by the individual farm situation and resources, including the significance of pig production at a total farm level and whether they have other enterprises or diversification. This could lead to short or long-term supply issues for UK-produced pork.”

 

By Alistair Driver / Pig World

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