The UK pig sector has a massive financial black hole to fill and is still in the very early stages of recovery, NPA chief executive Lizzie Wilson has told the BBC Farming Today programme.
Farming Today interviewed Lizzie to kick off its latest ‘Pig Week’, which will see it focus on the sector for the rest of the week.
Lizzie began by explaining that, despite record pig prices, which topped 207p/kg last week, producers are still facing extremely high feed costs, with wheat at £230-£240/tonne and soya at £500t, alongside soaring energy, labour and other costs. The most recent AHDB net margin figures showed producers were still losing, on average, £17/head in the final quarter of 2022.
“So sadly, even though the pig prices is really robust, at the minute it is still not enough to ensure that producers are making a margin. Then, when you consider that that it’s off the back of two years of continual financial haemorrhaging, that’s a really big black hole to try and backfill and it’s going take some time to recover from that,” she said.
You can listen to the interview HERE (about 7 mins in)
With the latest Defra census figures showing a 20% contraction in the breeding herd, Lizzie confirmed a ‘definite tightening in supply’ due to people being forced out of business because their financial situation, but also to the impact of last summer’s heatwave on fertility.
Pork supply chain review
Asked about Defra’s review into the pork supply chain, Lizzie said the initial summary of responses was expected ‘very shortly, hopefully about the end of this month’. “Hopefully, we will be able to make progress quite quickly from thereon in,” she said.
Summarising the NPA’s main asks, she said wanted to see some sort of legislation to underpin new pig contracts that will allow producers to negotiate much better and fairer terms with processors, incorporating a pricing mechanism and an effective dispute resolution mechanism. The NPA also wants to see better forecasting of what is happening in the supply chain and for retailers and pork buyers to make better use of the entire pig carcase than they do currently.
Finally, asked to summarise, the temperature of the pig sector at the moment, she added: “I would say it’s at the very start of recovery. Producers are a little more buoyant, but they’re still very, very cautious. It’s going to be a good couple of years, I would suggest, until you we get back to where we were a couple of years ago, when we were in a far more positive position.”