Weekly pig prices see biggest decline in five years

Pig prices have taken the biggest hit since 2016 as the ongoing staffing crisis continues to hit processors
Pig prices have taken the biggest hit since 2016 as the ongoing staffing crisis continues to hit processors

Weekly pig prices have seen the biggest decline in five years against the backdrop of staff shortages in pork processing plants and soaring feed costs.

There was a significant fall in the EU-spec SPP for the week ending 4 September, with the figure dropping to 156.39p per kilogram.

This means that producers received, on average, 2.31p less for their pigs than the week before. At this price, the SPP is the lowest since June.

The National Pig Association (NPA) warned that producers across the UK were currently facing a 'major crisis'.

According to AHDB analysis, this further decrease in pig prices was a result of constraints on slaughter and processing capacity due to staff shortages.

Recent falls in pig prices in most EU member states has likely also played a role, it explained, enabling pig meat imports into the UK to be more price competitive.

The AHDB highlighted how the pig backlog is growing. Estimated slaughter stood at 155,700 head last, slightly lower than the week before, but 12,100 pigs down on last year and nearly 16,000 lower than the five-year average.

According to the NPA, there are currently an estimated 85,000 extra pigs on farms across the UK, a number growing by approximately 15,000 per week.

It warned that the backlog and falling prices were being compounded by the fact that producers were having to use more feed at a time when it was 'incredibly expensive'.

GB pig production costs in the second quarter of this year reached a record 182p/kg, primarily reflects rising feed costs, according to recently-published AHDB figures.

This resulted in estimated net margins of -28p/kg (or -£24/head) in Q2, a similar situation to the first quarter.

NPA chief executive Zoe Davies said producers across the UK were either quitting the sector or cutting down on numbers due to mounting losses.

“The pig backlog is now creating further problems for farmers, forcing them to find extra cash for expensive feed and incur penalties for selling overweight pigs.

"Many are now being forced to face the real prospect of having to destroy pigs because there is simply nowhere for them to go.

“Some of the conversations I have had over the past few weeks have been heart-breaking, with many producers getting desperate and not sure what the future holds."

Without immediate government intervention, more producers would be pushed over the edge, Ms Davies warned, as 22,000 sows had already been lost from the national herd this year.

"Sadly we are expecting a serious contraction of the UK pig industry as a result, largely of the smaller independent farmers who are most at risk.”

The NPA was one of the food and farming groups behind a report by Grant Thornton, which called on ministers to introduce a 12-month Covid Recovery Visa to help alleviate the food supply workforce shortages.

The report estimates there are more than 500,000 vacancies across the sector and sets out how the visa could be a vital short-term measure to enable businesses to access foreign labour while the economy recovers from Covid.

“Unless the government intervenes soon to help alleviate the labour shortage, more producers will quit – and they won’t come back," Ms Davies added.