December 1, 2008

Feed prices threaten global pork industry


Players in the pork industry are joining forces by looking at working with consumers, the food service sector and retailers to increase prices given to producers.


That is one scenario representatives of major national pork bodies said how they could work together to beat occurring losses. They met at the 4th International Meat Secretariat (IMS) World Pork Conference in Nanjing, China.


Producers now face a higher wheat price, a major constituent of pig feed that has doubled over the last 12 months. Hence pig producers need a rise in what they are paid or the industry will go into meltdown. Losses are as high as GB£26 (US$52) for every pig they send to slaughter.


BPEX Chief Executive Mick Sloyan, who is also vice-chairman of the IMS Pork Committee, drew up a joint statement on the crisis, reading: "It is a problem of worldwide concern which must be tackled on a global basis."


The most significant issue is that of feed costs, which for most producers represent more than 70 percent of pork production costs.


Sloyan said that the worldwide grain price explosion is a result of poor harvests associated with difficult climatic conditions, but the most significant impact has been caused by the massive growth in demand for grain to produce biofuels, aggravated by many countries subsidising this production.


"Producer delegates spanning four continents said they are currently carrying substantial losses on every pig produced, a large number of producers are leaving the industry and more will follow. Producers are looking at all options to increase efficiency but in the short term those efficiency gains will fall far short of what is required to stop the significant losses occurring."


Immediate lifts in wholesale and retail prices, and producer returns, are required for industry survival. 


"Increasing producer prices now, would allow production to be maintained and would mean that wholesale and retail prices would not need to increase so greatly in the medium term. Producers are calling on consumers, food sectors to provide that support immediately and will be talking to retailers in their respective countries to explore how this can be done."


The organisations involved include the Canadian Pork Council, British Pig Executive, South African Pork Producers Organisation, New Zealand Pork Industry Board, Australian Pork Ltd, Nederlandse Vakbond Varkenshouders (Dutch Union of Pig farmers), the LTO, the Dutch Federation of Agriculture and Horticulture and the French Porcine National Federation, FNP.

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