Pig producer margins have moved back into the black for the first time since 2014, according to the latest estimates from AHDB Pork.
Although pig production costs in Great Britain rose again in the third quarter of 2016, to an average of 135p/kg, a more rapid rise in pig prices means that producer margins have returned to a positive position.
“Production costs were 3p higher than in the previous three months,” said AHDB Pork, “although they were still lower than the same point last year. However, a 17p rise in the average pig price during the quarter was sufficient to turn a £10 per pig loss during the second quarter into a small profit.”
There is also evidence that margins are “likely to have improved further” since the end of the third quarter.
“While feed prices have continued to rise since September, partly due to the weak pound, pig prices have also increased steadily,” said AHDB Pork. “Although this may be insufficient to lead to any significant expansion of the breeding herd, it should at least have ensured that sow numbers have stabilised.
“This adds weight to expectations that pig supplies may return to growth as we progress through 2017.”