NPA demands fair prices for pig producers
The pig sector in the UK has been impacted by prices offered by processors since mid-2018 and is still expecting to see an increase that will match the prices reported in the EU.
Figures from AHDB show margins turned red in the second half of 2018. In the last quarter of 2018, producers were typically losing £7 on every pig they produced and the losses have increased into this year, potentially by another £2-3/pig, as average prices have fallen further and costs have remained high.
Producers were expecting a change of fortune as the surge in demand for pigmeat from China, a result of the African swine fever virus wiping out around a quarter of their pork production, saw a big lift in the global pig price in the first few months of this year.
The EU pork price index has increased constantly since February, reaching to 147p (€1.66)/kg in mid-May, while the UK price has barely moved until May.
Processors have blamed the slow UK price response on Brexit stockpiling, as they have been making their way through excessive volumes of pigmeat put into storage in the first three months of this year. They have also spoken of weak demand. But NPA chief executive Zoe Davies said these excuses were not sufficient to explain the static prices and that furious producers were seeking answers. “These figures highlight the extent to which UK producers are losing out because of the actions of UK processors. We are talking about losses in the region £8m to £13m over just five weeks, which is totally unacceptable. We do not believe the gap between UK and EU prices is justified and want to see far more significant increases in the coming weeks,” she said
The NPA is also keen to discuss the possibility of a pork supply chain Code of Conduct with Defra to ensure fairer and more transparent pricing in the long-term.
NPA chairman Richard Lister said the recent UK price rises were an ‘insult to the hard work of the pig industry’. He said: “It is too little, too late. The price continues to push further ahead in the EU and the small increases we have seen do not come close to compensating producers for the millions
lost since early February. We have spent the last 10 years being told the price can’t go up further because Europe is too far behind. But we are now told prices can’t go up for multiple reasons. It is very difficult to know what to believe and where we stand. The excuses given by processors simply do not stack up – especially when we see the likes of Cranswick posting profits of nearly £90m, partly on the back of strong Asian export growth".
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