The average cost of pig production has increased again, as feed costs, interest rates, energy, and fuel prices continued to rise.
The October average cost figure of 232p/kg deadweight is up from 224/kg in September and means pig producers are estimated to be losing, on average, up to £28 per pig slaughtered.
Compound spot feed prices had eased during the summer, increased slightly in September and have risen further during October, although still not to the peaks of May and June. With the bank base rate at 2.25% throughout October, short and long-term interest rates have increased, while fuel prices continue to fluctuate, and energy prices are being maintained, but at an elevated level.
This added up to a full economic cost of production estimated to be 232p/kg deadweight in October, assuming average technical performance (based on 12-month averages, ending June 30, 2022). . This was up on the three monthly Q3 averages but down on the Q2 average of 240p/kg.
Assuming SPP and APP at 200p and 203p per kg deadweight respectively, pig producers were estimated to be losing £26 to £28 per pig slaughtered in October. The SPP remains at around the £2/kg mark.
Last month, AHDB estimated that, cumulatively, the UK pig sector has lost £700 million since autumn 2020.