The June pig census, published by Defra last week, shows the pig herd to have grown by 1.7% to 3.7m, with fattening pigs up 1.8% to over 3.2m, which the report said was a result of improved sow productivity. It showed breeding females had declined by 0.8% to 351,000, but admitted this had not taken into account feed cost hikes, which came into effect in mid-June.
The report said recent high feed and input costs may start to impact on returns and some destocking is expected, which may have more impact in 2012.
However, AHDB estimates that around 12,000 more sows have come out of the herd since the data was compiled, compared to last year, either as a result of producers coming out of the industry or reducing their stock levels.
Stephen Howarth, senior analyst at AHDB Market Intelligence (Pigs), said the June survey had been taken just before the effect of the US drought hit cereal prices in mid-June. He also pointed to other pressures on the market, with the average EU market price increasing sharply, due to a shortage of supply and issues of lighter carcase weights across southern Europe.
He said: “This drop-off in Europe is coming before the feed price and sow stall ban impact comes through, but the bigger effect will be seen next year.”
Although he welcomed the news that Sainsbury’s had upped its payment to pork development group (SPDG) farmers last month by 10p/kg until mid-October, and Asda was paying its producers an extra 8p/kg, he pointed out that temporary ex-gratia payments to a selection of producers were not enough to return producers to profitability.
Producers are still losing significant amounts of money, he said, despite evidence that prices are on their way up and feed prices are easing slightly. He pointed out that the current cost of production was around 169p/kg, compared to a DAPP of 152p/kg.