Tesco unveils £6.6m funding for pig farmers following criticism

The pig sector has welcomed Tesco's announcement that is putting more money into the pork supply chain to helping struggling producers
The pig sector has welcomed Tesco's announcement that is putting more money into the pork supply chain to helping struggling producers

Tesco has today announced £6.6 million in funding for pig producers after the sector singled out the retailer for not doing enough to support it.

The supermarket chain's new payment plan will see its suppliers increase payments to farmers by £6.6 million until August.

The retailer said on Monday (16 May) this would bring its support for farmers to a total of £10 million since the start of March 2022.

Tesco added that it would work with suppliers to ensure the investment gets passed to farmers 'as quickly as possible'.

The UK's largest supermarket also pledged to increase its British pork offering in stores. Overall, it has increased this by 30% compared to last year.

Pork producers across the country are facing unprecedented losses as costs of production soar due to record pig feed prices.

It currently costs an estimated 203-216p per kg to produce a pig, a figure forecast to rise even higher as wheat prices surge due to disruption caused by war in Ukraine.

Yet average pig prices remain below 170p per kg, meaning many producers are losing tens of thousands pounds each week.

The National Pig Association (NPA) has welcomed Tesco's announcement following criticism that it was not doing enough compared to its rivals.

Retailers hold the key to injecting more money into the supply chain, the NPA believes, and several of Tesco’s competitors, such as Sainsbury's and Waitrose, had already responded to the body's calls to increase their pig price.

NPA chairman Rob Mutimer had wrote to Tesco chief executive Ken Murphy urging more support. He said today: "We are very pleased that Tesco has responded following our letter, with some much-needed extra financial support for the pig industry.

"This is a very welcome boost for beleaguered pig farmers, who are currently facing unprecedented costs of production and need a tangible increase in the price they are being paid in order to stay in business.

"We look forward to seeing the pig price rising very soon as a result of this action and hopefully we can begin to stem the flow of producers exiting the industry."

New survey data by the industry body suggests there are still 100,000 pigs stuck on farms that should have gone to slaughter.

Farmers are losing in excess of £50 per pig due to the enormous gap between their cost of production and the price the supply chain is paying for pork.

The pig industry has already lost an estimated 10% of the breeding herd as producers have left the industry or cut down on production.

An NPA poll of its members shows that 80% will not be able to survive the next 12 months unless the gap between the cost of production and pig prices is significantly reduced.

Tesco's fresh commercial director, Dominic Morrey said the retailer 'fully recognises the seriousness' of the situation UK pig farmers were facing.

He added: "On top of the increased volume of British pork we’re now offering our customers, we will be increasing payments to British pig farmers by £10m through to August this year.

"We know there is more to do, and we will be working with suppliers, farmers and the wider industry to drive more transparency and sustainability across our supply chains.”