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Average cost of production reaches 244p/kg in June

1st Jul 2022 / By Alistair Driver

The average cost of pig production increased by 4p to 244p/kg in June, despite a welcome fall in the wheat price, according to AHDB. 

The wheat price has fallen from the May highs of around £330-£350, with AHDB quoting a figure of below £250/t today. However, while this is yet to fully translate into a lower feed price, lower returns on cull sows and interest rates have pushed overall costs up. 

AHDB analyst Carol Davis said feed prices may have peaked, at an elevated level, given the combination of the Ukraine war limiting their exports and some better than originally expected harvest and planting information coming in from other countries around the world.

"However, the full economic cost of production is currently estimated to be 244p/kg deadweight in June, assuming the same technical performance as for the 12 months ending March 31, 2022. Whilst feed prices may not be having such an impact this month, the reduction in cull sow returns and the impact of rising interest rates has impacted the cost of production," she said. 

While the SPP has continued to rise, topping 186p/kg last week, the latest cost figures highlight the fact that producers continue to suffer heavy losses on a weekly basis, which is why the NPA continues to call for further price rises from retailers and processors.