July 16, 2007

 

Soaring feed costs troubling British pig producers

 

 

Swine producers in the United Kingdom are in for the tough times as feed costs have jumped by 40 GBP per tonne in less than 12 months due to higher prices of cereals.

 

Returns to pig producers are ahead of last year, but this is more than offset by the added cost of feed.

 

British farmers and the father and son partnership of Jimmy and Robin Traquair, who are running more than 300 sows at Wellington Farm, near Dalkeith, are feeling the squeeze of feed costs.

 

Traquair senior said the 100 tonnes of barley costs a lot more than last year but prices of pork still remains. He said supermarkets still import 25 percent of its pork products from Denmark and the Netherlands which is relatively lower than the British counterparts.

 

Though major changes have been evident in the past seven years, production has clearly reduced. In 2000, the UK breeding herd numbered 578,000 head but have fallen to 500,000 despite modest expansion in 18 months. The contraction has been even more dramatic in Scotland, with the breeding herd now down to under 50,000 compared to 70,000 sows and gilts ten years ago. The number of farmers keeping pigs has also declined and it is estimated that only 100 producers are bent on continuing the business and are located in the North-east of Scotland.

 

Traquair and his son intend to stick with pigs for the time being but they stressed they need better prices to be viable on the longer-term.

 

British hog farmers also reel from the fact that imported pork does not meet the standards that exporters should adhere. Imports have also grown according to recent figures from Revenue and Customs which show that, in the first four months of this year, UK imported 155,236 tonnes of pork, almost 20,000 tonnes higher than in the equivalent period of 2006. Denmark was by far biggest exporter with 65,599 tonnes.

 

The Customs presume that based on current trends, pork imports this year will be close to 465,000 tonnes. In 2000, over the full year, the UK imported 243,200 tonnes. That growth in imports comes at a considerable cost to the balance of payments.

 

Ham and bacon imports also grew but at a less dramatic level, with the figures for the first four months of this year showing a total of 91,266 tonnes of which almost half came from the Netherlands. In 2000, total imports of bacon and ham amounted to 265,300 tonnes.

 

Industry players believe UK is lessening its role on the global swine scene. Total world production is estimated at 105 million tonnes per annum, and rising. China is the world's largest producer, with an output of just under 55 million tonnes while Russia is also expanding its pig herd which has increased last year by 16 per cent to over 17 million head.

 

Denmark is the world's largest exporter of bacon and ham, with the figures for 2005 putting this trade at 1.3 million tonnes. EU production is rated at 22 million tonnes, and UK's share, based on 2005 data, was just 800,000 tonnes. UK consumers have a fondness for both pork and bacon with a per capita consumption of 22 kilos, but this is far behind the appetite of the Danish who eat 76 kilos each year.