Estimated margins for September reach 20p/kg

The latest AHDB/BPEX provisional estimates show that the average cost of pig production fell further in September as spot feed prices continued to ease.

Average costs during the month were estimated to be 147.2p/kg, their lowest level since December 2011 and more than 6p lower than in August. As well as the reduction in feed prices, a combination of increased sow productivity and better feed efficiency has reduced the amount of feed used to raise each pig.

With the EU-spec DAPP currently sitting about 170p/kg, the notional net margin is 22p in the black, but many of the pigs being sold during September will have been fed during a period when feed was more expensive.

Estimates suggest that the lifetime cost of producing these pigs is about 10p/kg more than the estimated cost of production for September (which is based on the spot price for feed during the month), although this should still leave most producers opearting in positive territory.

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