United Kingdom - The impact of feed costs on the English pig industry

The biggest and most important single cost for pig producers is feed; on average it accounts for almost 60% of total production costs. It is no exaggeration to state that global rises in the price of feed are the biggest threat to the sustainability of English high welfare pig production and processing.
Monday 15 November 2010 (7 years 3 months 5 days ago)
The biggest and most important single cost for pig producers is feed; on average it accounts for almost 60% of total production costs. It is no exaggeration to state that global rises in the price of feed are the biggest threat to the sustainability of English high welfare pig production and processing.

The wheatmarket has been the subject ofmany newspaper headlines in recent months. The price of wheat has risen sharply tomore than £170 per tonne – its highest level since April 2008. There is no sign of any respite; the futuresmarket indicates that this high price is set to continue well into 2011. The consequences for English pig producers: a 20% increase in feed costs – that’s an extra 14% on total production costs. This situation, however, is not unique to the English pig industry.

The DAPP is currently 138p/kg or about £110 for an average weight pig. The DAPP has been declining since July and there is every likelihood it will fall further. The implications for the industry are serious. At a DAPP figure of 138p/kg, British pig producers are already losing an average of £8 per pig. If input costs, in particular feed, rise further English pig farmers face the prospect of losing even more on each pig produced. This is the equivalent of losing £1.2million every week or £62 million a year.

BPEX have compiled a three-point action plan to help the English pig industry
overcome the issues laid out in this report and avert another crisis:

1. Increase the DAPP
The industrymust respond by increasing the DAPP. The only sustainable
solution is for farmers to obtain a higher price for their pigs and as the vast
majority of British pork, bacon, hamand pork products are sold through
retailers this means securing higher prices fromsupermarkets.

2. Support English high welfare pigmeat production
Retailers need to be reminded of the importance of supporting English/Red
Tractor pigmeat production with its high welfare and quality assurance
standards – both factors which British consumers value. This alsomeans
supporting assurance schemes, such as the Red Tractor logo – an easily
recognisable badge of quality and country of origin.

3. Supply chain co-operation
The whole supply chain needs to pull together to ensure a profitable
production sector and that the industry continues tomeet demand for
quality, farmassured product. Retailers and processors alike need to ensure
this rise in retail prices is passed down the supply chain, to the producers
themselves.

http://www.bpex.org.uk/downloads/300916/298340/The%20Impact%20of%20Feed%20Costs%20on%20the%20English%20Pig%20Industry%20-%20November%202010.pdf

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