Just like the summer of 2024, prices in the pig sector over the past few months have been unremarkable. For every chink of sunshine something comes along to rain on producers’ parades, when they are really looking for a pot of gold at the end of the rainbow.
Prices have been fairly static in 2024, although over time have very slowly edged downwards. Pig production is currently reasonably profitable. However despite the fundamentals of pig numbers being well back on previous years and the country being little more than 50% self-sufficient in pig meat, the crisis of the early 2020s has knocked the proverbial stuffing from the sector; there is little appetite from producers to expand or interest from new entrants to enter the sector.
Standard Pig Prices (SPP EU Spec)
Prices peaked at just under 226 p.p.kg in August 2023, but saw a steady decline over the autumn and winter before levelling off at 211 p.p.kg in January (AHDB). Since then, prices have very slowly crept downwards reaching 209.84 p.p.kg by mid-August. One major concern for prices is the recent fall in prices in the EU, where, for example, prices in Germany have fallen by nearly 10% in the last 2 months. This has seen the differential between UK and EU prices increase, meaning EU pig meat is more competitive as it looks to find space on UK supermarket shelves. To add to the woes, the UK summer (or lack of it) has impacted on demand with the barbeque boost sadly missing.
Slaughter weights
Slaughter weights still remain historically high at just under 90kg, although have crept downwards from a peak of 91.68kg in early April (AHDB). Recent months have seen some uncertainty in the slaughter numbers published by DEFRA with some slight changes to the final figures expected. Regardless, the contraction of the UK sow herd in 2021 and 2022 has meant an equivalent reduction in pig numbers coming forward although this is mitigated in part by heavier carcass weights.
Cull sows & weaners
Unsurprisingly cull sows have followed pig prices in EU in recent months with values dropping 25% since April to around 90 p.p.kg (T.V.C.) in mid-August. Weaner values have remained fairly consistent with 7kg weaners trading at £53 – £55/head (T.V.C.) and while contracted pigs are still finding homes, surplus weaners are become more difficult to place although falling cereal prices may help boost demand from specialist finishers.
Costs of production
The latest published margins from AHDB (for Q2 of 2024) showed pig producers margins have slightly fallen over the last quarter at 17 p.p.kg (£15 per pig), back from 18 p.p.kg and £16 per pig in Q1. Costs had crept up slightly between the two periods, reaching 195 p.p.kg (£172 per pig). Within this, feed made up 62% of the total costs, at 120 p.p. kg or £107 per pig. Despite good margins now having been made for well over a year, helping replenish depleted bank balances after the preceding crisis, there is still some reluctance in the sector to expand or reinvest in capital projects again. There are also a number of empty or mothballed units across the country however very few parties willing to take the risk and fill them. The exception is those processors who also rear pigs, who have expanded pig production in recent years.
Figure 1. GB All Pigs Price (APP) vs. Cost of production Jul 2022 to Jun 2024, (Source: AHDB Pork)
ASF update
African Swine Fever (ASF) continues to cast a shadow on UK pig production as it continues to move across Europe. The latest outbreak assessment from Defra in July confirmed that outbreaks in domestic pig herds in both Germany and Poland had increased in June, and ASF in wild boar also detected in West Germany for the first time. The ongoing threat to the UK industry has recently seen the NPA and AHDB host an ASF simulation exercise, which saw 30 individuals from various bodies and government departments (including Defra, FSA and APHA) discuss the various protocols and decision making processes involved in a hypothetical outbreak. This included at an on-farm level and also the wider supply chain. One key piece of advice was the importance of detailed movement records of animals, deadstock and people to help speed up both decision-making and the implementation of restrictions in a suspected outbreak. Overall, this simulation exercise has helped improve preparedness in the event of an outbreak.
George Chalmers, SAC Consulting
This article is part of the September edition of Agribusiness News by the Farm Advisory Service. To read our full publication, visit:
Related Resources
Pig resources for farmers from Farm Advisory Service (fas.scot)
Health pigs | Helping farmers in Scotland | Farm Advisory Service (fas.scot)
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