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Average cost of production rises again

Alistair DriverBy Alistair DriverJuly 1, 20221 Min Read
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The average cost of production on pig farms increased by 4p to 244p/kg in June, despite a welcome fall in the wheat price. 

The wheat price has fallen from the May highs of around £330-£350, with AHDB quoting a figure of below £250/t today. However, while this is yet to fully translate into a lower feed price, lower returns on cull sows and interest rates have pushed overall costs up.

The full economic cost of production was estimated to have reached 240p/kg deadweight in May. AHDB analyst Carol Davis said feed prices may have peaked, at an elevated level, given the combination of the Ukraine war limiting their exports and some better than originally expected harvest and planting information coming in from other countries around the world.

“However, the full economic cost of production is currently estimated to be 244p/kg deadweight in June, assuming the same technical performance as for the 12 months ending March 31, 2022. Whilst feed prices may not be having such an impact this month, the reduction in cull sow returns and the impact of rising interest rates has impacted the cost of production,” she said.

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Alistair Driver

Editor Pig World, group editor Agronomist and Arable Farmer and Farm Contractor. National Pig Association webmaster. Former political editor at Farmers Guardian. Occasional media pundit. Brought up on a Leicestershire farm. Works from a shed in his Oxfordshire garden.

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