The NPA has warned that a disease outbreak in the British pig herd could cost producers up to 40p/kg and plunge the industry deep into the red.
This is because if you include offal, the UK pig sector is now exporting 25% of its output, which is one of the reasons prices are currently so strong, allowing most producers to pay back debt.
The value of pigmeat and offal exports was about £310 million in 2012 (with China accounting for £119 million), but the NPA has asked what would happen if there was an outbreak of exotic disease?
The organisation says Defra and BPEX have provided figures that show producers would suffer an almost immediate drop of 30-40p/kg, which would plunge every commercial pig unit in the country deep into heavy losses.
The total deadweight value of UK pigmeat last year was £1.22 billion, with exports accounting for a quarter of this. An export ban following a disease outbreak would see the meat currently being exported diverted to the domestic market, and the offal going to rendering plants.
As a result, the value of pigmeat products currently being exported would plummet from £310m currently to about £110m – a loss of £200 million.
And BPEX economist Stephen Howarth has suggested there would also be a knock-on effect on prices for other meat products in the UK market, given the increase in pork supply, so the total cost to the livestock sector would be closer to £320 million.