July 13, 2012

 

UK pig producers raise concern on soaring feed prices

 

 

Scottish pig producers have raised greater concern over soaring feed prices than the prospect of Vion closing its plant in Broxburn.

 

That was the view of Phil Sleigh, NFU Scotland pigs' committee chairman when he spoke to The Herald about the current cost-price squeeze being experienced by the pig industry.

 

He said, "About six weeks ago cereal prices were quietly slipping and we were expecting prices to settle at GBP140-145 (US$216-224) per tonne at harvest. At the moment, futures prices for September-October are running at about GBP185 (US$286) per tonne", said Sleigh, who runs around 400 sows producing 170 bacon pigs every week at Netherton of Mounie, Old Meldrum, in Aberdeenshire.

 

Referring to the price of soymeal, an important source of protein in pig rations, Sleigh went on, "Just before Christmas soy was about GBP290-295 (US$448-455) per tonne, but it is now over GBP400 (US$617) per tonne".

 

Feed accounts for nearly 70% of the cost of producing a pig and few in Scotland can make a profit at these levels. In addition, Scottish pig producers have to contend with a weakening Euro, at just under GBP0.79 (US$1.22), making imported pig-meat cheaper and our exports less competitive.

 

Deadweight prices for pigs have increased by around GBP0.02 (US$0.03) per kilogramme since the beginning of the year, to their current level of GBP1.503 (US$2.32), but BPEX, the organisation that represents pig producers south of the Border, reckons finished pig prices need to rise above GBP1.73 (US$2.67) per kilogramme deadweight to allow many to break even.

 

Put bluntly, many are losing GBP0.20 (US$0.31) per kilogramme or about GBP18-20 (US$28-31) per pig. That leaves a typical breeder, producing 23 pigs per year per sow, losing GBP46,000 (US$71,000) per year for every 100 sows he keeps.

 

The Scottish pig breeding herd has declined from 73,800 sows in June 1998 to about 32,200 in December 2011, but the current crisis could lead to further contraction.

 

Wallets Marts sold 1181 prime lambs in Castle Douglas on Tuesday (July 10) to a top of GBP90 (US$139) per head and GBP2.231 (US$3.44) per kilogramme to average GBP2.012 (US$3.11). A small show of 37 cast sheep sold to GBP115 (US$177) for Texel ewes.

 

Craig Wilson sold 12 prime heifers at Ayr on Tuesday (July 10) to a top of GBP1,337.50 (US$2,064) and GBP2.31 (US$3.57) to average GBP1,117.77 (US$1,725), or GBP2.088 (US$3.22), while 18 prime, beef-bred bullocks peaked at GBP1,436.50 (US$2,217) and GBP2.31 (US$3.57) to level at GBP1,277.49 (US$1,971), or GBP2.083 (US$3.21).

 

Four prime B&W bullocks averaged GBP1.578 (US$2.44), while two young bulls levelled at GBP2.042 (US$3.15). In the rough ring 126 beef cows averaged GBP1.473 (US$2.27), while 145 dairy cows levelled at GBP1.125 (US$1.74). Eleven bulls averaged GBP1.327 (US$2.05).

 

There were also 20 dairy cattle forward with Friesian calved-heifers selling to GBP2,470 (US$3,814), GBP1,900 (US$2,934), GBP1,890 (US$2,918) and GBP1,880 (US$2,903). The firm went on to sell 749 prime lambs in Newton Stewart to a top of GBP96 (US$148) and GBP2.154 (US$3.33) to average GBP1.922 (US$2.97). There were also 159 cast sheep forward with ewes peaking at GBP111 (US$171) for Suffolks and GBP70 (US$108) for Blackfaces.