Typically feed represents 60% of pig meat production costs and this has risen to over 65% in recent months. The impact of the dramatic rise in global and UK livestock feed prices has been to increase the cost of pig production to 170p per kg.
At present the average pig price is less than 152p per kg, resulting in an average loss of over £14 on every pig produced.Current futures market prices for livestock feed raw materials suggest that the cost of pig production will remain close to this level until at least July 2013 when the next season’s global harvests, the next opportunity to redress current global stock shortages, will commence. Unless pig prices improve this could result in UK pig farmers losing in excess of £100million in the year ahead.
The impact for consumers of the pig meat supply chain, closing the gap between production costs and pig meat prices, is estimated to be between 16p and 28p on a pack of four pork chops, depending on the attitude of all in the supply chain to maintain or increase the current percentage or absolute margins.
October 2012/ BPEX/ United Kingdom.