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Pig producers continuing to lose on average up to £33/pig, as total losses approach £750m

Alistair DriverBy Alistair DriverNovember 24, 20222 Mins Read
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The average cost of production for pig producers continues to rise, on the back of record feed and energy prices, with average losses estimated at up to £33 per pig produced in October. 

As well as an update on October cost of production, AHDB has published its cost of production and margin estimations for Q3, which indicates that full economic cost of production was 227p/kg deadweight, with pig margins estimated at -£23 per head.

This represents the eighth successive quarter of negative margins, although, while of little consolation to those on the frontline, the Q3 figures are less dire Q1 and Q2 losses of in excess of £50/head.

There was an overall decrease of 13p/kg in the Q3 COP from the Q2 figure of 240p/kg, with feed prices during the last three months down by 16p/kg to 159p/kg from a Q2 high of 175p/kg. However, poorer performance figures and lower carcase weights, plus higher energy, fuel and interest rates added 3p to the COP.

net margins

Total costs of production

While spot compound feed prices eased during Q2, compared to the highs of April, May and June, spot prices for October have risen. Together with significant increases in energy prices and interest rates, the updated October 2022 full economic cost of production is estimated at 237p/kg deadweight, up from 232p/kg in September.

Pig prices have risen, averaging 200p/kg (SPP) and 204p/kg (APP) for October, but remain some way short of the full economic cost of production, resulting in a continuing loss-making position for pig producers of around -£28 to -£33 per pig, according to AHDB analyst Carol Davis.

It is estimated that, based on the total pig slaughter numbers, the industry has lost £737m in the last two years.

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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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