November 17, 2003



UK's Feed Prices Rise May Hit Swine Industry

The United Kingdom Ulster Farmers' Union Pigs Committee chairman Nial Jordan has told Farming life that feed prices are likely to rise by as much as 10 sterling pound per ton in the run-up to Christmas.


"This follows a 15 sterling pound per ton rise in the period from the beginning of June to the beginning of November," he added.


"And there's no doubt this alarming trend will hit producer margins badly. Feed prices have remained remarkably stable over the past two years. And this is one of the main reasons why pig farmers have been able to stay in business.


"However, there's no doubt that the current upward movement in compound feed costs will place great stress on the viability of many units "


Recent months have seen a degree of stabilisation returning to Britain's pig sector. Producer returns rose by four pence per kilo in both September and October with the result that the average market price for pigs now stands at 95 pence per kilo.


"And there is scope for the processers to increase prices still further over the coming months," stressed the Pigs Committee chairman.


"There is a distinct shortage of pigs throughout the UK and Ireland at the present time. This is, in part, due to the introduction of a flu-like disease into Northern Ireland at the beginning of 2003. One of the symptoms of the conditions in a fall off in fertility and this is exactly what we are seeing at the present time. And it's likely to be well into the New Year before pig numbers start to pick up again."


The run-up to Christmas is traditionally accompanies by an increase in pig producer prices. This is then followed by a drop in returns come the start of the New Year.


"That trend was bucked somewhat at the beginning of this year with producer returns continuing to strengthen throughout January," explained Nial Jordan.


"And, given the current shortage of pigs, this could well happen again in live pig prices in Korea have fallen to the point that they are unable to cover farmers' production costs.


Average market prices for pigs in September were 134,000 won (68.31 sterling pound) for a 100kg animal, compared to 205,000 won (104.50 sterling pound) in June.


Following the 2003 Chusok holiday period, prices in September have fallen to a point that they no longer cover production costs, leaving pig farmers in a state of anxiety.


The collapse of prices can be attributed to the suspension of exports to Japan due to disease concerns, the prolonged slowdown of the Korean economy and an oversupply of animals being raised.

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