PHOTO: TIM SCRIVENER | PIG & POULTRY FAIR
REVIEW ▶▶▶
P&P Fair: Reform of UK pig industry is necessary
In the first post-Covid-19 edition of the British Pig & Poultry Fair in the United Kingdom, one thing became clear. A major reform of the UK pig sector is needed to stop the cyclical boom-and-bust scenario. It is currently seeing British pig producers lose £ 58/head (€ 68) in the first quarter of this year and has led to an ongoing backlog of pigs which has been running for eight months.
BY TONY MCDOUGAL, CORRESPONDENT T
he backlog, which at its peak last year was esti- mated to be around 250,000 pigs, has come down to 70,000 and could finally be cleared within five months, according to one leading processor.
Steve Ellis, Karro Food Group chief executive, was one of the speakers at the British Pig & Poultry Fair, held at the Stone- leigh Agricultural Centre in Warwickshire, UK, on 10–11 May. Producers, suppliers and the allied industry came together for two days of talking, sharing ideas and planning ahead. During his speech, Ellis said the current UK pig slaughters are between 230,000 and 240,000 pigs a week, around 15,000– 25,000 more than current demand, and could fall as low as 183,000 by August. Karro processes almost a third of the UK pigs as well as farm- ing 26,000 sows in Scotland and has slaughtered an addition- al 80,000 pigs through its Malton plant in North Yorkshire. Ellis said, “When profits are good, it stimulates additional pig production and vice versa. We are incentivised to go for a boom and bust mentality, which is hugely wasteful to our supply chain. The current market is a disaster for processors and producers. We have a high cost of production, a low pig price and a low meat price.”
Rethinking the current pig market Ellis said it was time to look again at how the industry worked. Tactical buying needed to be replaced with security of supply; total carcass balance should be brought forward rather than managing individual pork categories. There is also a need to integrate supply planning, long-term contracts and feed ratchets, as in the poultry meat sector, rather than them being index-linked.
38 ▶ PIG PROGRESS | Volume 38, No. 4, 2022
Frustration towards Brexit minister But there was also deep frustration at comments made by Brexit minister Jacob Rees-Mogg, suggesting the government would implement no further controls on food imports from the EU this year, even though border inspection posts are ready. With African Swine Fever (ASF) being discovered on the outskirts of Rome, Italy, early in May 2022, there are fears that current levels of biosecurity are not as high as originally promised post-Brexit. Costs on Mutimer’s north Norfolk farm have risen by 52p/kg (€ 0.61) since the start of the Ukraine war, and he said that his costs of production were likely to be £ 2.43/kg (€ 2.86). Additionally, the sector was still struggling from a lack of skilled labour.
Margins at an all-time low Angela Christison, AHDB pork sector director, said that while margins were at an all-time low, pork remained in demand from both British and overseas consumers. Exports last year brought in £ 567 million (€ 668 million) to the supply chain or £ 50 (€ 59) per pig. Duncan Wyatt, AHDB lead analyst, also tried to provide some optimism to the hard-pressed sector, saying there would be a decline in production in the second half of the year. Imports and exports that had fallen by 21% and 46% last year due to Brexit and Covid-19 respectively had reversed in the first two months of this year, showing rises of 30% and 55%. Asia and the US were seen as export markets in the year ahead, with the US market having potential for higher value cuts, but the recovery of China’s national herd and ongoing Covid-19 prob- lems meant that the market would be restricted to heads and trotters.
Rob Mutimer, chair of the National Pig Association, said many producer contracts were not fit for purpose; marketing strat- egies had not advanced in the past 20 years; and the sector (retail, processor and feed) was rife with monopolies and oligarchies.
Mutimer said the UK government was looking to see what changes could be made across the supply chain and that an announcement was likely within the next six months. Legisla- tion could be brought forward or an Ombudsman established. Both speakers said greater collaboration was needed between producers, processors and customers in the supply chain.
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