Britain is in danger of losing close to 10% of its national pig herd unless retailers and processors act now to help farmers offset increases in grain prices, Bpex has warned.
Pig producers were currently losing £9 on every pig after the spike in grain prices brought about by the Russian wheat export ban and production shortfalls in Europe had pushed feed costs up by 30%, Bpex said in a new report this week.
Unless retailers stepped up to the plate and paid more to support British pig farming, many farmers would start thinking twice about continuing their herds at current capacity, said Bpex head of marketing Chris Lamb. "Between 2007 and 2008 [during the world food crisis], we lost 7% of the national herd. This time the loss could be even greater than that."
According to Bpex's analysis, the average production cost for a finished pig now stands at £150p/kg compared with £131p/kg last year, while the deadweight average pig price (DAPP) has slumped from £146p/kg in 2009 to £141p/kg in 2010, the report said.
Soaring wheat prices had had a particularly damaging effect on pig producers because the nature of their business meant they were not as flexible in their dealings with supermarkets as other industries, Lamb added. "What's happened with Hovis withdrawing its products from Tesco after they didn't want to raise the price you can't do that with pigs. We've got animals on the ground right now and we can't just withdraw."
To rectify the situation, Bpex has proposed a three-point action plan: an increase in DAPP, particularly through higher prices from supermarkets; greater support from retailers for English high-welfare standards and the Red Tractor scheme; and increased cooperation throughout the supply chain to ensure any rise in retail price is, in fact, passed on all the way down to the producer.
In 2007, Bpex's Pigs Are Worth It campaign resulted in retailers increasing the DAPP from 110p/kg to 140p/kg.
Pig producers were currently losing £9 on every pig after the spike in grain prices brought about by the Russian wheat export ban and production shortfalls in Europe had pushed feed costs up by 30%, Bpex said in a new report this week.
Unless retailers stepped up to the plate and paid more to support British pig farming, many farmers would start thinking twice about continuing their herds at current capacity, said Bpex head of marketing Chris Lamb. "Between 2007 and 2008 [during the world food crisis], we lost 7% of the national herd. This time the loss could be even greater than that."
According to Bpex's analysis, the average production cost for a finished pig now stands at £150p/kg compared with £131p/kg last year, while the deadweight average pig price (DAPP) has slumped from £146p/kg in 2009 to £141p/kg in 2010, the report said.
Soaring wheat prices had had a particularly damaging effect on pig producers because the nature of their business meant they were not as flexible in their dealings with supermarkets as other industries, Lamb added. "What's happened with Hovis withdrawing its products from Tesco after they didn't want to raise the price you can't do that with pigs. We've got animals on the ground right now and we can't just withdraw."
To rectify the situation, Bpex has proposed a three-point action plan: an increase in DAPP, particularly through higher prices from supermarkets; greater support from retailers for English high-welfare standards and the Red Tractor scheme; and increased cooperation throughout the supply chain to ensure any rise in retail price is, in fact, passed on all the way down to the producer.
In 2007, Bpex's Pigs Are Worth It campaign resulted in retailers increasing the DAPP from 110p/kg to 140p/kg.
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