Lack of demand for surplus pigs a cause for concern - NPA
4th Dec 2018 / By Alistair Driver
Cheap imports and relatively high demand for RSPCA Assured pigs has resulted in unusually weak demand for surplus Red Tractor pigs, creating additional pressures on some farms in the run up to Christmas.
Producers are struggling to find outlets for surplus Red Tractor pigs after contract requirements have been filled, with the spot market currently very flat.
While industry experts disagree on the precise causes, the availability of significantly cheaper imports certainly appears to be a factor, as the gap between the UK and EU price has widened in recent weeks.
AHDB’s Bethan Wilkins said slaughter levels have been lower than expected recently. Throughputs will need to pick up significantly in the next few weeks if AHDB’s forecast 4% year-on-year rise in slaughterings in Q4 is to be achieved. “If this doesn’t happen, there could be an overhang into January,” she said.
She pointed out that the gap between the UK and EU average pig reference prices had widened to 25p/kg in mid-November, significantly above the average (18p/kg), mainly on the back of a significant drop in the EU price. She suggested, with reportedly better demand for RSPCA Assured pigs over Red Tractor, retailers have been substituting Red Tractor pigs with imports.
Chris Fox, Thames Valley Cambac’s northern livestock manager, said there had been unprecedented demand for Freedom Food pigs in the run in to this Christmas, with demand seemingly outstripping supply.
Valuer and industry commentator Peter Crichton said it is getting harder to sell pigs at this traditionally busy time. “Contract spaces remain tight and although now is the time for buyers to start putting forward extra numbers to cover the Christmas/New Year shut down, there seems to be very little appetite for extra pigs at present, which could lead to a significant backlog building up over the festive period and beyond,” he said.
NPA chairman Richard Lister said: “There just seems to be an extremely slack demand out there. I think it’s a short-term blip. We have got a very difficult trading environment, which probably wasn’t helped by a short-term glut of Belgian product on the market. Hopefully, things will correct as we move towards the spring and there’s a thinning in pig numbers.
“It can be uncomfortable when pig numbers build up on farms, so we would urge anyone who might be affected to plan accordingly. As the spotlight shines on the industry, it is vital that high standards are maintained at all times.”
NPA chief executive Zoe Davies said: “We have been contacted by a number of producers who are extremely worried about the situation. As well as the obvious financial implications, there are also potential practical implications on farms.”
"Because of the EU/UK differential it’s a really tough market out there and and we are doing everything we can to highlight to retailers the need to maintain a constant supply of Red Tractor pork, rather than capitalising on short term gains.
"While the NPA cannot ultimately dictate how many pigs processors are willing to take, we are taking action in response to the situation. This week we have launched a new campaign, ‘The Pork Report’.
"With the help of the wider industry, it is aiming to put the spotlight on the extent to which retailers are supporting British pig farmers through their sourcing polices and how they display and label their pork products."
We will have more information on the Pork Report soon...