Maybe the time has come for processors and producers to work together

In the latest issue of Pig World, our industry industry, Red Robin, further explores the relationship between pig producers and pork processors. 

I am disappointed that we find ourselves in the situation where the pig price has fallen sharply post-Christmas and while it may well pick up later on in the year, none of us need the angst that a volatile price causes us.

As pig producers become fewer and fewer, there are less and less specialists in the financial arenas that support us who have a true understanding of how our sector works, and that makes life increasingly difficult.

I have said before (and at risk of becoming boring) that it is very difficult to produce any kind of financial forecast when you really have no idea what the price is going to be next week, never mind in six month’s time.

This isn’t good for us, and I don’t really believe it is good for the processor, either. We have one part of our sector that is part of the vertically integrated multiples and the other part that is independent farms, either selling to independent abattoirs or the big integrators.

A quick look at AHDB Pork’s retail pork price reporting, and we are certainly don’t see a price trend that follows the UK pig price. The fact that they seem to fluctuate within a relatively narrow band suggests that there is no reason for us to have a price that reaches the highs of 160p and the lows of 140p within an 18-month period.

That price difference can result in a change of fortune of around £192 000 per annum for a medium-sized pig unit (this won’t be news to any of you!).

In fact, it’s a miracle that we have managed like this for so long. How do any of us plan anything? Improvements and repairs are off and on again like a… insert your own metaphor!

For the ever-diminishing number of independent pig producers I think it is time something changed. Ultimately, we need processors to send our pigs to and the processors need us to send them pigs.

Maybe the time has come to try to work together, to start viewing each other as part of the solution and not part of the problem. If we could work with them without having to own an abattoir and they could work with us without having to own any pigs, then maybe we could make some progress.

I am not convinced that the big integrators really ever wanted to own sows, but they needed the security of supply. At the moment, I simply don’t understand how the selling of meat works from the processor to the retailer, but maybe I should and maybe that would help me make some informed decisions about what we should be being paid.

If you recall, when the NPA was formed, pig producers were commended by the government for doing something constructive themselves. Campaigns and lobbying and publicity of our plight are all commendable and I am delighted that they are happening.

New zero pledge

The harsh reality is that food inflation never won any votes, and the government will do their best to limit it, and that is beside having Covid to pay for and climate change to solve.  Don’t think for one minute that I am defending them because I am not, but I am saying we need to be self-starters.

I never thought I would say this, but I like NFU’s pledge of net-zero by 2040 – it is a point of difference and something for people to buy in to (literally and metaphorically). The only worry is that retailers get that for free, but it might make them think again, for a while at least, about replacing British product with non-British product.

There are a few examples of independent pig producers who supply food service who have made some positive environmental changes that help to promote their product.

If we were able to work with processors in a collaborative way, we might be able to do a similar thing and that would benefit both parties.

If it is possible to do this, then it is going to take determination, initiative and an awful lot of time, but we have shown before that we have the first two in spades, and, if it’s important enough, we can find the time too.

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About The Author

Editor of LBM titles Pig World and Farm Business and group editor of Agronomist and Arable Farmer. National Pig Association's webmaster. Previously political editor at Farmers Guardian for many years and also worked Farmers Weekly. Occasional farming media pundit. Brought up on a Leicestershire farm, now work from a shed in the garden in Oxfordshire. Big fan of Leicester City and Leicester Tigers. Occasional cricketer.