UK pig meat producers hit by 20% rise in costs

UK indoor pig producers faced a staggering 20% increase in costs last year, a new report has revealed.

The report, which examines the cost of pig meat production in 17 countries, has been published by the Agriculture and Horticulture Development Board (AHDB).

The Pig Cost of Production in Selected Countries has been updated with full-year data from 2021, showing GB costs for indoor pigs increased 20% to £1.79 per kg.

All EU countries experienced an increase in costs of production compared with 2020, with the average cost reaching £1.50 per kg deadweight, up 6% in sterling terms.

The UK reference price of £1.50/kg was 7% lower in 2021 than the previous year, resulting in negative margins for the whole year.

The UK saw an average increase of around 20% in feed prices between 2020 and 2021, compared with the overall average EU price rise of 9%.

Increased feed costs and lower pig prices made for difficult year

AHDB lead analyst Carol Davis said: “2021 was a particularly difficult year for pig producers in the UK.

“Increased feed costs and lower pig prices, coupled with a backlog of pigs due to butcher shortages in abattoirs, all resulted in negative margins last year.

“And although pig prices increased significantly from April this year, they have not been sufficient to cover the continued elevated cost of production.”

Carol added: “If GB indoor producers were achieving the EU average at breeding and rearing finishing stages on the same cost basis, they could reduce their 2022 Q3 costs of production from 227p/kg to 218p/kg.

AHDB's Pig Cost of Production in Selected Countries report highlighted the increased costs of production facing the industry and the challenge to hit margins despite a strong April this year https://t.co/3DGqudRlNe pic.twitter.com/tbfurB8LYG

— Food Manufacture (@FoodManufacture) November 24, 2022

“If all GB indoor producers were achieving the performance of the top third of GB producers, 2022 Q3 costs of production would be 198p/kg.”

The report shows that pigs weaned per sow per year in the GB’s indoor herds increased slightly in 2021 to 27.7, but this is still below the EU InterPig average of 29.7.

Outdoor herds in the UK showed a small decrease, achieving 24.3 compared with 24.4 in 2020.

The average number of pigs finished per sow in GB indoor herds increased in 2021 to 25.6; this is lower than the EU average of 27.9.

Indoor herds in GB continued to produce more than two tonnes of carcase meat per sow per year.

Excluding Italy, which produces heavy pigs for Parma ham, the highest producing EU country is the Netherlands, which achieved 2.99 tonnes of carcase meat per sow, closely followed by Belgium and Denmark.