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Pig industry crisis - NPA blog, June 17: Questions asked about Tesco funding

17th Jun 2022 / By Alistair Driver

Updates on the latest developments as NPA seeks solutions to crisis hitting pig sector. 


June 17, 2022

Producers ask where Tesco money is

Ahead of Tesco’s AGM today, pig farmers are questioning whether the extra money pledged by the UK’s biggest retailer will get to them.

You can read more HERE


 

June 16, 2022

SPP up another 2.5p, but further increases needed

The EU spec SPP rose to a new recored high of 183.10p/kg in the week ending June 11, following a further increase of 2.53p.

Following 16 consucutive upward movements, helped by retailer and processor contributions, the price index is now 27p higher than where it was a year ago and nearly a similar margin above the five-year average. 

prices June 11

For the week ending June 4, the EU spec APP rose a further 4.39p to 188.59p/kg, widening the gap between to two price series to just over 8p.

The price increases, including, recently, a further increase to Cranswick's contribution price, are welcome, but analysis shows that some retailers are doing much more than others to help.  

The context, of course, as it has been for some time, is that costs of production remain at record levels, estimated by AHDB to be averaging 240p/kg in May. Despite a recent slight easing of the wheat price, which is now around the £300/tonne mark, there is no immediate prospect of this coming down significantly any time soon. 

Figures from AgroVision, shared with the NPA, show the impact of falling sow numbers and services is already feeding through in terms of significantly lower weaner numbers coming through the system. AgroVision's April weaner number figure for its large anonymous sample was 23% down year-on-year. 

With the sow numbers (-13%) and services (-21%) also significantly down year-on-year, it is now increasingly evident that once the backlog is cleared, the current surplus of pigs could rapidly, perhaps in the late-summer/early autumn, turn to a shortage. 

The NPA is urging the supply chain to continue to take steps to increase the pig price to avoid further industry contraction and a long-term shortage of British pigmeat. 

The backlog continues to come down. Estimated slaughter last week, at 177,600 head, was up 15% on the previous week due to bank holidays and, more significantly, around 25%, 36,500 head, above last year.

Carcase weights averaged 90.20kg/head, in line with the previous two weeks, but are still nearly 4kg above above last year, suggesting the backlog has come down signifcantly from the start of the year, when the average hit the 95-96kg mark, but that things are not yet back to normal. 


June 9, 2022

SPP tops 180p for first time - but still way short of record COP

The EU-Spec SPP was up by nearly 4 last week to top 180p level for the first time in its history.

The price index reached 180.57p/kg in the week ending June 4, 3.84p up on the week, meaning it has now risen by 43p since prices starting heading in the right direction in mid-February. It is now 25.5p above the level of a year ago. 

Meanwhile, the EU-Spec APP rose by 0.29p in the week ending May 28 to average 184.20p/kg.

In usual times, these figure would be a cause of celebration across the pig sector. But, of course, these are anything but usual times, and while the price increases are very much welcome and necessary, the stark reality remains that the pig price is still barely keeping price with record production costs. 

AHDB's most recent update put the estimated cost of production for May, at 240p/kg, highlighting the huge gap that remains and the fact that pig producers continue to lose unsustainable amounts of money on a weekly basis. 

Pig prices have been boosted by additional contributions from retailers but these vary significantly and the benefits to producers depend very much on the nature of their supply chains.  

Against this backdrop, the NPA continues to call on the retailers and processors to do invest money to get producers back into a position where they can breeak even. 

On the cost front, there has been some small relief over the past few weeks as the feed wheat price has come back to around the £300/tonne market, albeit still at unprecedented levels historically, compared the £330/t to £350/t spike seen in May. This is on the back of talks about getting Ukraine's vast stores of grain out of the country for export, although the practicalities of that remain shrouded in uncertainty. 

Estimated clean pig slaughter in the shorter week was 155,000 head. This is 29,000 fewer than the week before, with many abattoirs reportedly observing at least one of the bank holiday days.

Carcase weights fell compared with the week before, albeit slightly, to average 90.14kg. This is still a substantial 3.7kg heavier than a year ago.


May 26, 2022 

SPP up, slaughterings down

The EU spec SPP increased by another 3.19p last week to reach 175.95p/kg, a new record high, following 13 uninterrupted weekly increases. 

It now stands at more than 36p above the mid-February figure, 24p higher than a year ago, and nearly 22p above the five-year average. 

prices May 21

However, while the SPP continues to move in the right direction, helped by some important retail investments, it is still a very long way off from matching the estimated average costs of production, estimated for April to be in the region of 230p/kg. 

Less good news on throughput, however, as the industry looks to finally get rid of the backlog that has exacerbated the input inflation crisis, on top of its impact on welfare, logistics and the emotional wellbeing of the farmer.  

Estimated slaughter was down 3.7% last week to 178,600 head, also representing a dip of more than 5,000 on a year ago, although still 12,000 above the five-year average. 

In a good sign, however, average carcase weights continue to fall, albeit down fractionally last week to 91.06kg. This is 5kg below their heaviest recording back in late January, but still remain 5kg heavier than at the same time last year.


May 25, 2022

Cranswick revenue surpasses £2bn, as profits grow

Cranswick’s revenue topped £2bn in the last financial year, up 6%, while its profits also grew by 6% to top £140 million.

However, fresh pork revenue, which represents a quarter of the total, was down nearly 8%, reflecting ‘the pass through of lower average UK pig prices during the year, softer export prices and reduced Far East export volumes’.

Fresh pork retail sales were ‘modestly lower’ year-on-year, while Far East export revenue was 25% down, reflecting reduced demand from China and the ongoing suspension of the Norfolk site’s China export licence.

However, Cranswick said weekly average pig numbers processed during the year increased by 1.5 per cent to 62,300, peaking at 67,200 in February 2022, with the additional volumes supporting increased demand from the Group’s Convenience and Gourmet Product businesses.

The big driver for the revenue growth was Cranswick’s poultry operations, which, accounting for 20% of revenue, grew by31%, following the capacity uplift in at its Eye factory and the recovery of food service revenues. Convenience revenues were up 6% and gourmet revenues up 5%.

The pork and poultry processor said its strong financial performance, which was in line with expectations, had been achieved despite ‘unprecedented industry wide labour and supply chain challenges’, which it said were ‘well managed with excellent customer service levels maintained’.

"The cost inflation we continue to experience, a global phenomenon, is being proactively managed and recovered,” group chairman Tim Smith said. 

More HERE


May 23, 2022

Co-op and Waitrose show lead the way in commitent to our sector

Waitrose and, over the weekend, the Co-op, have shown what can be done, with investments of £16m and £19m respectively to ensure pig prices reflect producers’ soaring costs of production.

Given their market share, this commitment to British pig production puts the contribution of some of the bigger players into perspective.

Indeed, the Co-op has a market share of 6%, but said its support outstrips any of the big four retailers combined, which have a combined market share of almost 70%.

Its pledge for the UK pig sector reflects the introduction of a new pricing model designed to help farmers manage rising production costs, by linking the price to the cost of production, rather than the market price for pigs. It will be reviewed monthly to ensure that the price remains reflective of the costs that farmers are facing.

The Co-op is urging other retailers to ‘go the whole hog’ and support UK pig farming support by sourcing more British-produced pork. Matt Hood, Co-MD, Co-op Food, said: “Some of the support for the sector is too little but it’s not too late for supermarkets to do their bit to help more British farmers.”

Similarly, Waitrose senior agriculture manager Jake Pickering has called on the entire food industry to support UK pork farmers. 

Well played to them both. And while we welcome the contributions made by all the retailers, we echo the sentiments of Waitrose and the Co-op that much more needs to be done to secure future supplies of British pork.


May 19, 2022

More modest increase for SPP 

The pig price continues to rise, although the latest SPP increase is a relatively modest one by recent standards.

The EU-Spec SPP rose by 1.15p to 172.76p/kg in the week ending May 14. While this is the smallest increase seen since the SPP started its upward movement in February, it is now standing at new record level after 12 weekly rises.

The price measure is 22p higher than a year ago and 19.5p above the five-year average.  

Prices May 14

It is still nowhere near enough, however, with average costs estimated at 230p/kg in April and likely to be higher now. There was more bad news on the feed price this week after India's ban on wheat export sent wheat prices beyond £360/tonne earlier this week, although AHDB was quoting feed wheat for May at £333/tonne.  

A number of retailers have responded to NPA's calls to increase the price paid to pig producers, most recently Tesco, which said it was investing an extra £6.6m increase payments to pig farmers until August. 

But with costs still rising, prices are still nowhere near at the level needed for producers to break even - and the NPA continues to stress the need for all parts of the supply chain to go further to ensure future supplies of British pork remain available. 

In the week ending May 7, the EU-Spec APP rose by 5.44p to 180.07p/kg, bringing the gap between the two series to 8.46p.

Estimated slaughter in the week was 185,500 head, 7,000 head more than the previous, shorter week and nearly 19,000 above the five-year average. The backlog continues to come down, but there is further to go on that front. 

A sign of the progress being made is that the average carcase weight in the SPP sample fell by close to 1kg to 91.19kg last week, compared with the late-January high of nearly 96kg. The figure remains 4.4kg heavier than a year earlier.


May 18, 2022

Waitrose calls for 'entire food industry' to back British pig producers

Waitrose senior agriculture manager Jake Pickering has written an article in the Grocer outlining Waitrose's support for the sector and calling on the entire food industry to support UK pork farmers. 

You can read it HERE

Waitrose also featured its £16m pledge for the pig industry in the latest issue of its in-store publication. 

Waitrose pig


May 17, 2022

NPA welcomes Tesco move on pig price 

The big news yesterday was Tesco's announcement that, following pressure from the NPA, it is joining other retailers in investing in the price paid to pig producers. 

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

You can read Rob's full response and more details on the Tesco move HERE  

You can read the open letter the NPA sent to Tesco chief executive Ken Murphy calling for a price increase HERE

The Tesco has prompted some positive coverage in the media, including the BBC and the Guardian. 


Wheat price soars even higher after India export ban 

While pig producers have received some encouragement on pig price of late, wheat prices continue to soar to new highs.

AHDB was quoting feed wheat for May at £361/tonne today, on the back of another spike caused by India’s decision on Friday to ban wheat exports.

India, the world’s second largest producer of wheat, banned all exports with immediate effect after a heatwave affected the crop. The Government is concerned about the impact of rising global wheat prices since the start of the Ukraine war and is looking to protect its domestic prices.

More HERE


 

May 13, 2022 

Cranswick Salmonella recall 

Cranswick has been forced to recall a number of its cooked chicken products prepared in its poultry factory, in Hull, from a range of high-profile outlets. 

This was after a routine internal inspection had identified the salmonella bacteria at its poultry premises at the plant.

Products were recalled from: Aldi, Amazon, Caffé Nero, Co-op, Costa, Jamie Oliver deli by Shell, M&S, One Stop, Sainsbury’s, Starbucks, Tesco and Waitrose.

More HERE


Irish farmer protests

Pig farmers and members of the Irish Farmers Association (IFA) have been protesting at four processors based in and across Ireland this week.

Calling for higher pig prices, the protestors began at 6am Monday morning, at Carty Meats in Athlone, Co. Westmeath; Pilgrims in Shillelagh, Co. Wicklow; Oakpark Foods in Cahir, Co. Tipperary; and Connollys Pork and Bacon, Co. Monaghan.

IFA pigs committee chair Roy Gallie said: “We need €2/kg from the marketplace, otherwise the industry is in jeopardy of extinction and there won’t be Irish pig meat on the shelves.”


BBC reports on Shropshire pig farmers' industry exit

Peter Woodhall and his son-in law Nigel Lloyd are closing their pig farm as costs have soared due to feed prices 'going through the roof’,

With a nearly 50% increase in the cost of feed, the farm went from profit to potential losses of hundreds of thousands of pounds – almost overnight.

“Sadly, the last six months, feed prices have gone up about 48-50%,” Mr Woodhall told the BBC. At the same time, the pork price plummeted and a lack of abattoir workers caused a huge backlog on farms.

The current situation has left Mr Lloyd thinking that ‘there won’t be the place for a small family farm’. He added: “If something doesn’t change, then it’s pretty terminal for the British pig industry.”

More HERE


May 12, 2022

Another big increase for the SPP 

The pig price has regained its momentum, with the SPP surging by nearly 5p to top 170p/kg for the first time since it became the standard industry price measure in 2014. 

The EU spec SPP was up by 4.78p to 171.61p/kg for the week ending May 7, following a series of welcome but more modest rises during April, including by just short of 2p the previous week. 

pig price may 7

The SPP has now increased by 33p since mid-March and is now nearly 23p higher than a year ago and 19p above the five-year average.  

The weekly hikes come on the back of rising EU prices, although these have flattened off recently, and contributions to support producers made by a number of retailers, including Waitrose and Sainsbury's.

Tesco, the biggest and most influential when it comes to pig price remains a notable exception and the NPA continues to urge it act to help secure its future supplies of pork

While the increase in the pig price is giving producers some hope for the future, the harsh reality is that it remains a long way short of the unprecedented costs of production they face. 

AHDB, which estimated average losses of £58/pig in Q1, says costs have risen since, reaching 230p/kg in April. NPA chairman Rob Mutimer told the Pig Forum at the Pig and Poultry Fair that costs on his 750-sow outdoor unit were currently averaging 237p/kg. 

For the week ending April 30, the EU spec APP was at 174.63p/kg, up 3.04p on the previous week, widening the gap between the two price series to 7.8p.

The EU Reference for the week ending May 1 was 161p/kg, 2p up on the week, and 7.6p below the UK Reference price. 

Progress continues to be made on reducing the backlog, although estimated slaughter was down by 7,400 head last week to 188,190 head. However, the figure remains, nearly 10,000 higher than a year ago and more than 22,000 above the five-year average. 

Carcase weights continue to fall from the late-January high of nearly 96kg, averaging 92.06kg last week.


May 9, 2022

More coverage of our Tesco letter 

The excellent coverage of our the NPA's letter to Tesco boss Ken Murphy calling for urgent support for the pig sector includes this in the FT (and below for those without a subscription). 

FT Tesco

Meanwhile, the NPA's Charlie Dewhirst told BBC Radio Humberside why the NPA wants to see 'action, rather than words' from Tesco, in response to the NPA's calls. 

You can hear the feature HERE (from 3 hours, 36 mins). 


May 7, 2022

Waitrose backs pig producers, NPA calls on Tesco to step up

With pig producers facing catastrophic losses in March on the back of soaring production costs, the NPA issued a plea to all the big retailers. The message was simple - they needed to pay their pig producers more or lose them for good.  

There has been a mixed response. Some really have stepped up the plate. 

Waitrose deserve huge credit for its announcement of a new £16m support package to ensure its pork suppliers cover their soaring costs of production. This follows on from Sainsbury's supportive actions last week

The NPA also understands that, in different ways, Aldi, Asda, Co-op, M&S and Morrisons have taken action to get money into the chain, although in some cases, more is needed. 

The UK's leading retailer has not responded so far. Which is why the NPA has sent an open letter to Tesco CEO Ken Murphy asking for the retailers support. 

Rob stresses that Tesco is in a unique position to help because of its UK market share and vol- ume of pork sales. “Unless action is taken now and a fair price is paid, there will not be a do- mestic pig industry left to service the demands of your shoppers and we know how much they value fresh British produce,” he wrote.

You can view the letter HERE and press release we issued yesterday HERE

There's already been a good response to the press release, including coverage in the Guardian and on Sky News under the stark headline: 'Destruction of UK pig sector' looms unless Tesco pulls its weight, chain is warned

There has been good pick in the Farming press, and more interview requests are coming in for NPA staff.


Tesco responds

Tesco has issued a response. A spokesperson said: "We fully recognise the seriousness of the situation UK pig farmers are facing and have been working closely with our suppliers to understand what more we can do to support the sector.

"Through the buying models we already have in place, our suppliers have increased payments to farmers by £3.4million since March 2022. However we would like to do more and are actively working with our suppliers on a further enhanced payment plan to support farmers in the short term."

We are seeking clarification on whether that £3.4m refers to pig prices specifically, or the wider farming sector.  


Zoe to leave NPA after 14 years of incredible service

It was a busy day yesterday, with movement on the retail front (and a lack of it prompting a press release), but there was very significant news from the NPA as well. 

Zoe is to leave the NPA in August to take on a new role at the NFU. “The decision has not been an easy one to make, but I honestly feel that now is the right time for me to make this change personally and for the NPA," she said. 

Chairman Rob Mutimer said the pig sector owed Zoe a huge debt of gratitude. “The board is very sorry to see Zoe go, but she departs with our very best wishes for her future role and huge thanks on behalf of everyone connected to the pig industry for the monumental shift she has put in over the years."

More HERE and Zoe's contribution to the NPA has been praised on the FORUM.


May 5, 2022

SPP continues to increase but momentum slowing 

The SPP was up by nearly another 2p during the week ending April 30, taking it to 166.83p/kg. It now stands at more than 19p above this time last year and 15p above the five-year average, following 10 weeks of uninterrupted increases since early March. 

However, the rate of increase has slowed markedly. The price index has risen by 9p in three weeks since the week ending April 9, after an increase of 16p in the three weeks previous to that. 

One factor has been a slowing in the processor contribution price rises, while UK prices are showing a simillar trend to pig prices in the EU, where price movements, although still positive have been slowing in recent weeks.

"This is despite some public statements by some retailers that they are putting more money into the price to support producers," AHDB said in its weekly price update. 

In the week ending April 23, the EU-Spec APP rose by 3.76p to 171.59p/kg, meaning that the gap between it, and the SPP in the same week widened to 6.67p

Slaughterings remain healthy as progress continues to be made in reducing the backlog. GB estimated pig slaughter was 195,600 in the week ending April 30, 7,000 head more than the previous, shorter week, 17,000 up on a year ago and 24,500 above the five-year average.

Pig prices Ap 30

Carcase weights averaged 92.29kg, 500g lighter than in the previous week and continuing fromn highs of around 96kg earlier in the year, although pigs in the heaviest weight band still made up more than 10% of the SPP sample.


May 3, 2022

Pig costs going up and up 

The cost of producing pigs is set to rise even further, with the impact of further feed prices hikes potentially adding another 20p/kg to a figure already well in excess of £2/kg, according to AHDB.

AHDB recently estimated that average cost of production for pig was currently in the region of 203-216p/kg, up from 193p/kg in Q4 due to rising feed and energy costs. With prices at the time around 150p/kg, this equated to average losses of up £61/pig.

While pig prices have risen since then - the latest SPP was just short of 165p/kg - so have costs.

"Our article earlier in the month stated that we estimated that the current full economic cost of pork production was in the region of 203p/kg to 216p/kg.  As feed ingredient prices and compound feed prices start to trickle through, indications are that feed price increases alone are likely to add another 20p/kg onto the cost of producing a kg of pork."

More


Sainsbury's boost, but others need to do more 

The NPA has welcomed the move by Sainsbury’s to invest up to an additional £2.8m to increase the price paid to its pork suppliers. 

Sainsbury's helpful actions provide all its suppliers, not just those in its pork development group, the opportunity to align all pigs to a fixed price from March 13 to June 5, helping them cover soaring costs of production. 

NPA chief executive Zoe Davies said this ‘fantastic news for their pig producers’ and praised all the retailers that are trying to get more money through to their producers.

But with average production costs well in excess of £2/kg and set to go higher as further feed ingredient prices feed through, she stressed that ‘some retailers still need to do an awful lot more’, including the UK's biggest retailer.

While the pig price is still rising – the Tribune bacon price is up another 2p to beyond 179p/kg and the latest SPP was up 3p last week to just under 165p/kg – it is still has a long way to go to lift the pig sector out of its current financial mire.


Import checks anger

Another one from last week, in case you missed it.

The NPA has warned that the Government's decision to abandon plans to commence physical checks on EU imports exposes British farmers to the risk of devastating diseases like African swine fever (ASF) entering the UK. 

More HERE


EFRA chair to stand down as MP 

The chair of the Environment, Food and Rural Affairs (EFRA) Committee Neil Parish has told the BBC he is resigning as an MP, after admitting he watched pornography twice in Parliament.

Mr Parish has been a big supporter of the pig industry, particularly during the pig industry crisis. The committee’s latest report on labour shortages in the food and farming industry was widely welcomed within the industry, making a number of important recommendations to improve the situation.

More HERE


April 28, 2022

SPP continues to rise but progress slowing

The EU spec SPP rose by a further 3.18p last week to reach 164.92p. 

prices Ap 23

While the SPP continues to move in the right direction, and now stands 26p higher than in mid-March, the rate of increase is slowing, following hikes of 7p and 4p in the two weeks previous.

The measure is now nearly 20p above last year's price and nearly 15p above the five-year average - but, with average costs now typically well in excess of £2/kg, there is a long way to go yet until we reach break-even point. 

The EU spec APP rose to 167.83p/kg for the week ending April 16, an increase of 3.37p from the week before and narrowing the price gap of the two series to 6.09p.

The estimated slaughter numbers continue to be healthy - at 188,600 head, it was up, 5,300 head, 3%, on last week, 10,500 higher than last year and nearly 18,000 above the five-year average. 

The backlog is clearly coming down as demonstrated by falling carcase weights, which fell below 93kg last week, compared with a high og 96kg in late-January. However, the figure remains 4.6kg above year earlier levels, suggesting we still have some way to go.

To see the weekly price graphs, click here


April 27, 2022

Cameron continues to promote industry message

Following well-received appearances on Channel 4 News and the BBC earlier in the month (see below), Wiltshire farmer Cameron Naughton has highlighted the industry's plight on ITV West Country News. 

With wheat costs soaring, he estimates that his production costs have soared from 165p/kg late last year to 210p/kg now. With a price of around 170p/kg, he estimates he is losing around £5,000 every week on his 5,000-pig herd. 

Full story HERE


April 26, 2022

Further Irish pig support imminent - but with a twist

Irish Minister for Agriculture Charlie McConalogue is reportedly set to announce a further €13m support package for Irish pig producers.

But while the package could provice farmers with up to €70,000, access to the new fund is conditional on farmers reducing production by 10%, RTE reports

The support comes, with Irish farmers losing an estimated €40 per pig, as costs soar on the back of the Ukraine war. The latest package follows a €7million scheme already announced in February.

The NPA has written a joint letter with the NFU to Defra Secretary George Eustice detailing the financial crisis facing the sector and calling for urgent, direct support for producers in England


'We've lost 40,000 sows'

Zoe has been addressing NFU council this morning, setting out the devastating situation pig producers face amid soaring costs of production and the continuing fallout from labour shortages in pork plants. 

"We have now lost more than 40,000 sows, which is 10% of the national sow herd," she said. "We will lose a lot of the small independent producers, and I find that very sad."


April 25, 2022

Market momentum slowed by factory issues and short Easter week

Factory issues and the ‘echo of the Easter’ break took some of the shine off market momentum last week, according to Thames Valley Cambac. 

Prices were helped by another large rise in the SPP – up 4.01p at 161.74p, but contract contributions stood on. “Supplies remained ample although average weights now seem to be easing,” TVC said in its latest market update. “The fresh meat sector was a touch more buoyant, encouraged by decent demand in the wake of a warm Easter, which has rekindled barbecue trade.”

More HERE.


Forum latest - import check delays

"Ladies and Gentlemen, outrageous," suggests the latest forum poster in response to signs the Government will, once again, delay the implementation of checks on EU imports, possibly indefinitely.

You can read it and have your say HERE


April 22, 2022

NPA calls for hardship fund as BBC highlights industry plight again 

Sussex pig farmer Andrew Strong has told BBC South East he can no longer sustain the losses he faces in producing pigs. 

He is getting out of pigs to focus on his arable business. "It's crazy," he says, when discussing the gulf, around £50, between the cost of producing a pig and how much they are being paid. 

NPA chief executive Zoe Davies calls for Defra to provide a hardship fund for producers. 

You cab view the feature HERE (approx 8 mins, 30 secs). 


April 21, 2022

SPP still on the rise

The SPP continues to rise, albeit at a slightly slower pace. It was up a further 4p in the week ending April 16, to 161.74p/kg, following the previous week’s massive 7p increase.

It is now nearly 18p on last year and more than 12p above the 5-year average but remains well short of the £2+/kg mark needed for producers to break even. 

In the week ending April 9, the APP rose by nearly 9p to 164.46p/kg, meaning the difference between it and the SPP in that week widened to 6.73p

Pig price Ap16

Progress continues to be made on reducing the backlog, although there is still some way to go. Estimated slaughter in the shorter week ahead of the Easter weekend was 183,300 head, 9% lower than the previous full week’s kill, but still well up on the five-year average.

Carcase weights were steady at 93.14kg, still significantly heavier than at the same time last year and indicative that the backlog is still very much with us.


April 20, 2022

NPA and NFU call on Eustice for 'urgent, direct support' for producers

In case you missed it, the NPA has written a joint letter with the NFU to Defra Secretary George Eustice detailing the financial crisis facing the sector and calling for urgent, direct support for producers. 

Full story HERE


NFU Scotland calls for pig price to go beyond £2/kg

Meanwhile, in Scotland, retailers and processors must increase the prices paid to pig producers to beyond £2/kg or risk losing the sector, according to NFU Scotland. 

NFU Scotland’s pigs committee chair Jamie Wyllie estimates that the current cost of production, including surging feed, labour, haulage and energy costs, is around 204p/kg, meaning the SPP must break the £2/kg barrier soon just to allow producers to start breaking even after many months of recording crippling losses.

Full story HERE

The NPA is also continuing to call on the supply chain to ensure pig prices go beyond £2/kg soon to ensure access to supplies of British pork in future.


Charlie talks food security on GB News

The NPA's Charlie Dewhirst took part in an informative discussion on GB News today how the Ukraine war could spark a global food crisis. 

You can view it HERE (Charlie's contributions are around 17 and 28 minutes in). 


April 15, 2022

SIPs scheme extended for second time

As progress continues to be made with easing the backlog, the Government has extended the Slaughter Incentive Payment Scheme (SIPS), which incentivises processor to put on extra kills to help get through the backlog. 

The scheme was due to close at the end of March, after its initial extension, but it has now been extended until June 30. This is something the NPA had been pushing for. 

Around 30,000 pigs have been through the scheme so far, with more of these extra kills lined up. 

There are clear signs that the backlog is being addressed, although issues remain on some farms.

Estimated GB slaughterings have been relatively high of late - last week's figure of 203,000 head was 18,700 up on a year ago and nearly 32,000 up on the 5-year average. 


Cameron highlights industry plight again

Well done to Cameron Naughton again. It is not easy opening your soul to the media when your business and life has been turned upside and you are struggling to see a future. 

Cameron explained what so many in the industry are going through for a second time this week, this time on BBC Points West, after his Channel 4 slot last week. 


April 14, 2022

SPP starting to motor, but a long way to go

The SPP is starting to motor, as the momentum builds. The pig price index was up a massive 7.18p to 157.73p/kg during the week ending April 9.

That puts it more than 15p above last year's price and nearly 9p above the 5-year average.

However, with costs of production in the region of 203p/kg to 216p/kg and producers currently losing £46-61 per pig produced, the pig price needs to go a lot further to enable producers to break and keep them in business. Fears of a mass exodus have not been averted and, as AHDB says in its weekly market update, some very difficult decisions are having to be made by a number of pig producers.

We still need to say a lot more urgency from some of the big players in the retail world. 

There is more good news on the backlog. The estimated slaughter last week was 203,000 head, up 5,000 head on last week, 18,700 on a year ago and nearly 32,000 on the 5-year average. 

Carcase weights, averaging 93.17kg, are coming down but remain historically high. The backlog of pigs is still present on some farms and will take time for processors to work through, AHDB said.


April 8, 2022

Producers losing £46-£61/pig, as costs top £2/kg

More hard facts and figures showing why the pig price needs to get beyond that £2/kg mark...

Pig producers are currently losing, on average, between £46 and £61 per slaughter pig, with costs of production typically above the £2/kg mark, according to AHDB.

These staggering losses and costs of up to 216p/kg highlight yet again the urgent need for pig prices to rise beyond £2/kg so that producers can get back to break-even point.

You can read more HERE


Historic pig/wheat price data highlights why pig prices need to rise

The relationship between the pig price and the cost of feed wheat is now, by a long distance, the least favourable it has been for pig farmers since records began, more than a decade ago.

AHDB records the pig to feed wheat price ratio on a weekly basis, measured as the feed wheat price as a percentage of the pig price (APP and SPP), and this sheds some stark light on the financial situation currently facing producers.

The index currently stands at more than double the comfort zone of pig price/wheat cost parity.

You can view Pig World's analysis HERE


Cameron Naughton on Channel 4

If you haven't seen it yet, Channel 4 ran an excellent feature on the pig sector's plight in the context of the EFRA report on labour shortages. It features Wiltshire producer Cameron Naughton, who echoed the concerns of many when he told the programme the indutry feels 'abandoned' by the Government. 

More HERE


April 7, 2022

SPP continues upward trajectory

The SPP continues to head in the right direction, albeit still not as quickly as many would like or need. 

The price index, which forms the basis of many contracts, was up a further 3.56p for the week ending April 2 to top 150p/kg for the first time in a while. 

That represents a 12p increase in the space of three weeks, following substantial hikes in processor contribution prices, and puts the SPP nearly 9p above last year's price and 2p beyond the five-year average. 

prices Ap 2

But, of course, with producers facing costs of production in excess of £2/kg, this is nowhere near enough, as the nature of the SPP, a price average, makes its unable to respond to market shifts as readily as many would like. 

The NPA continues to press at all levels for continued price increases, so producers can return at least to break even and we can secure pig production in this country. 

Meanwhile, EU prices continue to soar, with the EU Reference Price now ahead of the UK equivalent. Only a few weeks ago, the UK pig price 'premium' stood at in excess of 30p/kg. 

Backlog

There is better news on the backlog, too. Estimated slaughter was up nearly 6,000 head on the week to 198,200 head, 11,000 up on last year and 22,000 beyond the five-year average. 

The average carcase weight remained unchanged at 93.75kg. This is over 2kg down from the end of January where we saw our heaviest pigs reported, indicating that we are gradually processing the backlog of pigs, although average weights are currently over 5kg heavier than this time last year, AHDB noted.


April 5, 2022

Case study highlights why pig price needs to go beyond £2/kg

A pig producer has highlighted the impact of soaring input costs on their business to demonstrate why the pig price needs to lift beyond £2/kg, if producers are to survive.

Cereals account for 60% of the diet, and the increase from £200/t to £300/t since the start of the Ukraine war represents a £60/t rise in finished feed cost, they said.

You can read the details HERE


NPA calls for further pig price rises

The NPA is calling for further pig price increases as producers continue to face a battle for survival, despite recent gains. 

The association is continuing to push at all levels, including regular contact with Farming Minister Victoria Prentis, to get to a sustainable position that will secure the future of pig production in the UK. 

More HERE


April 1, 2022

Contribution prices up again 

The big players have upped their contribution prices again today, as the market continues to respond to the combination of soaring costs and rising EU prices. 

With different processors going up by different amounts each week, there is now quite a range - according to Peter Crichton's weekly market report, most weekly prices are now between 168p and 190p. 

However, while the SPP has shown very encouraging signs in the last two weeks, including a leap of more than 5p, this week, the nature of how it is calculated means it is still some way behind these contribution - and where it needs to be. 

With production costs standing above £2/kg and many producers struggling to survice, the NPA continues to make the case across the supply chain for price increases. We remain in regular contact with Victoria Prentis, feeding in the producer perspective as she holds meetings with the big retailers. 

Our message is that while the price increases are welcome, they are nowhere near enough yet.


Meanwhile in Europe...

European pig prices continue to soar at an unprecedented rate, with the EU reference price now higher than its UK equivalent.

Only a few weeks ago, at the start of February, the EU Reference price stood at 108.7p/kg, compared with a UK reference price of 141.3p/kg, providing a UK ‘premium’ of nearly 33p.

After gradual increases in February, the EU leap up by 7p, 14p, 13.5p and 4p in March to stand at 152.3p/kg in the week ended March 27. This compares with a UK figure of 149.3p/kg for that week.
The most dramatic increase has been seen in Germany, where after a long period of over-supply and rock-bottom, the market has turned on its head, with the German reference price up from 107p/kg in mid-February to 164.6p/kg by the end of March.

There have been further increases this week, although the pace of change seems to be slowing. 

Against this backdrop, it might seem surprising that the European Commission has just launched a private storage aid scheme for pork, as part of a wider support package for EU farmers, following the huge issues caused by the Ukraine war. 

You can read more HERE 


March 31, 2022 

Record increase for SPP - but more needed

Better news on the SPP this week, as the impact of the processor contribution price increases starts to become more noticeable. 

The price index was up by a significant 5.28p to average 146.99p/kg in the week ending March 26.

This is the largest weekly rise recorded in the price series since it began in 2014, and marks the fifth consecutive week of price rises. This follows the strong rise recorded in the previous week, following increases in weekly contributions from a number of processors.

The figure was up 6.4 up on a year ago, but still more than a penny down on the five-year average. 

Pig prices Mar 26

While the record increase in the SPP is still welcome, it still leaves producers a long way short of where they need to be, with costs of production in excess of £2/kg. The NPA has written to all the retailers asking for them to raise prices beyond £2/kg, but, generally, is still waiting for the response required. 

The processor increases appeared to stall on Friday. After increasing its processor price by a massive 30p to 180p/kg on March 18, Morrisons-Woodheads was up another 5p to 185p/kg. But, according to Peter Crichton, the other major players have generally remained at last week’s levels, between 158p and 160p. 

The nature of the SPP, which is basically price average, means it will always respond more slowly, up and down, to market changes, than other pricing mechanisms. This has prompted calls from the NPA, with backing from Karro chief exec Steve Ellis, for the industry to move away from the SPP as the principle price-setting mechanism to get money to producers more quickly.

Meanwhile, pig prices continue to soar in Europe, notably in Germany, as supplies of available pigs fall. The EU reference price has gone up from 110p in early February to 147.6p/kg in the week ending March 20. After successive hikes of 14p and 13p, it is now above the UK reference price. A few weeks ago, the gap was more than 30p. 

Slaughter numbers

Slaughter numbers remain reasonably healthy. The GB figure for the week ending March 26 of 192,300 head was down 1.8% from numbers during the previous week, and 3% below numbers during the same week a year ago, but 17% up on the five-year average. 

For a fifth consecutive week, average carcase weights continued to decrease, averaging 93.75kg in the week ending 26 March. This was 420g lighter compared to the week before.


March 28, 2022

Less movement on processor price increases

There was some upward movement on prices from processors on Friday, but nothing like the lifts seen on the previous two Fridays. 

After increasing its processor price by a massive 30p to 180p/kg on March 18, Morrisons-Woodheads was up another 5p to 185p/kg on Friday. 

But, according to Peter Crichton, the other major players have generally remained at last week’s levels, between 158p and 160p, 'with some of the larger buyers still reporting supply exceeding demand'.

Of course, the big processor price increases of recent weeks are yet to feed into the SPP, which was up just 3.2p last week to 141.7p. The NPA has written to retailers calling for pig prices to be increased to £2/kg to enable producers to cover their costs of production. 

There is some support for this within the supply chain. Karro's chief executive Steve Ellis has told Pig World that prices need to rise rapidly and that the supply chain needs to find alternative pricing mechanisms that can respond more quickly to market signals than the SPP, to ensure price increases further up the chain feed through to desperate producers immediately.

The NPA's chief executive Zoe Davies said the SPP should be left as a price reporting mechanism. 

“Contracts should not be based on the SPP as it is pegged to a historical price,” she said. “There needs to be far more consideration of what it currently costs to produce a pig. Whatever the price is based on, it must result in the producer being paid a fair price and enough to make a profit, not just to break even.” 


March 25, 2022

Media coverage of industry

GB News interviewed the NPA's Rebecca Veale about the dire financial situation facing the pig sector. You can view the interview HERE


March 24, 2022

SPP up 3.2p, after big processor increases

After two successive Fridays of big processor price contribution increases, including Morrisons' 30p hike to 180p, the SPP has responded. 

But it has only gone up by 3.2p to 141.71p/kg in the week ending March 19. While this a yearly high and 2p up on a year ago, in reality it doesn't come close to reflecting the scale of the processor increases. 

"The rise follows announced price increases last Friday by some processors, via their weekly contributions. These increases would have then fed into the weekly price overall. A further increase in the SPP next week could be expected, as further increases in weekly contributions have since been announced," AHDB said.

The SPP is a price reporting mechanism and the fact that it is central to so many price contracts has always meant, UK prices tend to rise and fall more slowly than on the continent, where prices are more spot based. 

With producers desperately needing additional income into their businesses now, as costs surge even higher on the back of the Ukraine, there is plenty of discussion within the sector about whether we should remove SPP from the price-setting equation. 

Karro's chief executive Steve Ellis has told Pig World the supply chain needs to find alternative pricing mechanisms that can respond more quickly to market signals than the SPP, to ensure price increases further up the chain feed through to desperate producers immediately.

The NPA's chief executive Zoe Davies agrees. “Contracts should not be based on the SPP," she said. "There needs to be far more consideration of the costs it takes produce the pig in the first place and whatever system we use must result in the producer being paid a fair price and make a profit.”

prices mar 19 21

Estimated slaughter last wee, at 196,000 head, was down 3,600 from the week before, but 8,000 up on a year ago and 21,400 above the five year average.

In a further welcome sign that the backlog is coming down, albeit gradually, carcase weights dropped again to 94.17kg/head, the lowest weight recorded since the beginning of the year. Weights are still 5kg/head heavier than the same time last year.


March 21, 2022

Morrisons-Woodheads up 30p!

The big news this morning is that Morrisons-Woodheads has increased its contribution price by 30p to 180p/kg.

Others were reportedly up 10-15p, as retailers and processors, to differing degrees, appear to be responding to the soaring costs of production that are threatening the viability of pig production and rapidly rising pig prices across Europe, which are making imported pork less attractive.

The NPA has written to all the big retailers asking them to increase their pig price to at least £2/pig so producers can at least have a chance breaking even.

Most UK pig producers are facing costs of production in excess of £2/kg, as the post-Ukraine wheat price spike pushes feed costs even higher. Producers were already losing more than £40/pig in the last quarter of 2021, a figure that will have risen considerably since.


March 18, 2022

Imports up big time in January

Pigmeat imports into the UK in January, at 83,000 tonnes, doubled compared with a year ago, with volumes also 22% higher than in December.

AHDB lead analyst Duncan Wyatt said: "Weakness in the EU market has meant a plentiful supply of competitively priced product. Combined with the continued re-opening of the foodservice market here, this meant that import demand in January picked up."

Imports of bacon, a key foodservice staple, rose to 27,000 tonnes in January compared with 9,500 tonnes a year ago and 17,500 tonnes in December.

However, Mr Wyatt said it was 'not clear that this rapid increase in imports will be sustained', as pig prices rise sharply across Europe on the back of a shortage of slaughter-ready pigs.

UK pig meat exports were down by 11% in January on the previous month as the UK 'struggles to make its mark outside a year on from its formal exit from the EU', Mr Wyatt said. A marked recovery in the Chinese pig herd and the oversupply of pork in the EU has affected shipments. 

More HERE


#BiteIntoBritish - amplifying the message

Some thoughts from Hugh Crabtree, one organisers of this week's Aldi #BiteIntoBritish promotion, including the promise of more events to come:

"The store promotion at ALDI in Hessle went very well indeed and the sun was out which always makes it feel better. A team of 20 or so industry people spoke to shoppers and press, handing out leaflets, #biteintobritish bags and quite excellent pulled pork rolls from Anna Longthorp's hog roast oven.

"It's important to understand the reason for putting on an event like this is to provide a newsworthy activity for press and media. Their interest and reporting amplifies our message for free as obviously talking to a couple of hundred shoppers isn't going to revolutionise the futures of British pig farmers. It's very good for farmers to be doing something positive right now as it helps take the mind off all the other worries they have - at least for a few hours - and talking to shoppers confirms there's real demand for British produce.

"Looking forward, we need to keep our story running so there will definitely be more activities to come. I hope we can step and repeat our store promotions in other areas and we may need to get a little more direct with retailers to make them understand the fragility of the prime producer suppliers right now as a result of rocketing feed costs."


Oh George! What parallel universe are you living in?

It is fair to say that, while some within Defra really do get it, George Eustice has not exactly been a vocal, proactive supporter of the pig sector during its hellish nine months. 

In fact, the Defra Secretary has tended to play down the problem and blame everyone but the Government for the industry's plight. Defra has tried to help, but it has been a hard battle to secure it. 

Neither has the Cornish endeared himself to the wider farming community with some of his policies and rhetoric on the transition away from BPS towards environmental schemes. 

But even by his standards, some of his comments in an interview with ITV's Martyn Oates yesterday were quite extraordinary and prompted a furious response within the farming social media community.

In one clip posted by the journalist on social media, Mr Eustice said: "In terms of the reductions that we're making to the subsidy payments, farmers have more than recouped that through the increased income they've been getting for the produce they've been growing."

And, in another, even more unfathaomable for pig producers battling with record costs, following the post-Ukraine spike, and low pig prices, he suggested 'farmers will generally be able to recover increased input costs from the higher prices they're also getting in the market'.

Needless, the reaction flowed from within the pig sector and beyond, with NFU president Minette Batters one of the first to react, agreeing that Mr Eustice was existing in some sort of 'parallel universe'.

"Really....to say I’m flabbergasted is an understatement. Unless the world wakes up to the many mouths Ukraine was feeding we’re headed for disaster - the #ArabSpring will look mild. We will need serious global action to ensure vulnerable, poorer countries achieve #FoodSecurity," she wrote. 

Others were less charitable, as you will see if you take a look at the tweets. "Absolutely clueless and out of touch," was one of many taking up the theme. "So far removed from agriculture!" was another.

By all means let us know your thoughts via the forum... 


Why 'sticky' SPP will take time to respond

A few eyebrows were raised when the SPP only went up by 0.4p on Wednesday, coming on the back of last week's big processor increases, not to mention soaring prices in Europe. 

According to AHDB analyst Duncan Wyatt, the processor price increases came too late to feed into last week’s SPP. They will, however, be reflected in future in the price index in the future, although producers should not expect dramatic hikes, along the lines of those being seen in Europe.

More HERE


March 17, 2022

Aldi shoppers urged to #BiteIntoBritish

Great work today by the pig industry campaigners who turned up in really good numbers to promote the industry at an Aldi store in Hessle, East Yorkshire.

Consumers were delighted to engage with the messages about why they should #BiteIntoBritish and the store's management and staff needed little encouragement to get involved, too.