September 2, 2015

UK pig production costs in Q2 at 5-year low

Total pig production costs in the UK during the second quarter this year were at their lowest level for the past five years, according to the latest estimate of the AHDB Pork.

AHDB Pork, a division of the UK's Agriculture and Horticulture Development Board, said, however, that despite this, producers lost money for the second quarter period in a row following 18 months of profitability for producers.

It said costs fell by 15p (US 23 cents) per kilogramme during the second quarter compared with a year earlier but that pig prices slumped by 28p (43 cents) per kilogramme, moving producers from profit to loss. Compared with the first quarter of the year, however, costs were around 8p/kg lower, while pig prices fell by about half this amount, somewhat improving producer margins during the second quarter.

The reduced costs were largely driven by further improvements in productivity and efficiency of the herd and lower feed prices, according to AHDB Pork.

Lower feed prices, combined with better feed conversion, meant that feed costs made up only 55% of the total, AHDB Pork said, adding this was the lowest level recorded since the first quarter of 2010.

Improvements in breeding performance also helped reduce costs overall, AHDB Pork said.