Feed prices may well drift back this spring at a time when pig prices are likely to firm producers at the ‘Securing the Future’ seminar were told by Aidan O’Toole of Devenish Nutrition.
“Typically farmers were paying 70p a kilo for pig feed in June 2010 and now, 18 months later, the cost is around £1 per kg. A feed price volatility that has huge implications for pig profit levels.
“Making predications on the feed price front is always a risky business and even more amidst the worrying global economic turmoil. However, current trends would suggest a feed price down at 90p per kg a few months from now.
“All being well pigs in 2012 should average £135 to £140 a kilo if not more, which means margins will remain tight, but the efficient producer could see, at last, a much needed period of real profitability,” the senior pig nutritionist at Devenish added.
“The combination of a marginal pig price strengthening, weakening feed costs and increased animal performance on truly efficient farms will surely give these well run businesses the chance to take profits, reduce borrowing and even upgrade housing.”
Aidan based this upbeat view on figures from the USA showing sow numbers at almost 10% below 2007 levels and signs that EU stock levels are falling back due to a period of unsustainable losses plus the impact of the stall and tether ban.
Export demand globally is strong at a time when EU consumers also see pigmeat as good value compared to other meats. Indeed supplies of competitive meats are falling and hence the rise in wholesale quotes for pigmeat.
“Despite 40% of US corn going for ethanol production there are encouraging signs that the cereals and soya harvest in 2012 will be good and prices more reasonable.
“As ever, the chances of these upbeat predictions coming true depend on the weather and world events, not least what happens on the euro front amidst concerns about a global recession or even 1930s style depression.”
January 2012 - Devenish Nutrition