NPA chairman Rob Mutimer has called for further increases in pig prices to at least stem the huge losses from pig farms and ensure the future viability of the sector.
Addressing the Pig Forum at this week’s British Pig and Poultry Fair, Mr Mutimer highlighted how the impact of the Ukraine war on feed prices had forced his input costs to soar even higher.
He has estimated that the cost of production on his 700-sow outdoor pig farm in Norfolk has increased by 52p/kg following the invasion in late-February and is forecasting that it will be in the region of 237p/kg, or even as high as 243p/kg by late-summer/early autumn.
Pig prices have also risen since the invasion, from 1.35p/kg at the time to more than 170p/kg at the end of last week, but they need to go much further still.
“That completely defies all economic logic as during that period of time we had a surplus of probably 150,000 pigs at the time and we’ve had a surplus all the way through,” Mr Mutimer said. “From a producer’s perspective, while that’s not nearly good enough as a rise, it does indicate that someone does actually want to buy a pork going forward. If not, the price would probably still be 135p/kg.
“But while the rise is great, we’re still losing an awful lot and it still nowhere near the 52p/kg rise in our cost of production since late-February.”
Mr Mutimer said the fact that we still have between 70,000 and 100,000 pigs backed up farms, nearly a year after the problems first emerged, should be seen as a ‘real embarrassment’ to everyone in the industry.
“We should never ever have got ourselves into this position for this long. The personal toll it’s taken on a lot of people in the industry, both producers and in the allied industries, has been horrendous. We must ensure we don’t end up making farms a lairage in the future again.”
He stressed the need, longer-term, for much sounder and professional contractual relations between producers and pig buyers, describing it as a ‘disgrace’ that many current contracts were written 15-20 years ago and have not been properly since. Better forecasting was also vital to ensuring more a more functional supply chain, he added.
Karro chief executive Steve Ellis also addressed the forum, urging the entire pig supply chain to increase the price paid to producers to beyond the £2/kg mark.