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Pressures on pork production in England

Pork

Despite high pig prices through 2022, the pork sector has faced a long period of losses, according to AHDB. This had led to a contraction in the pig herd, as reported in the latest Defra livestock survey. As of June 2022, overall pig numbers were down by 3%, a drop of 129,000 head.

Posted on Sep 16 ,04:23

Pressures on pork production in England

The overall breeding herd contracted by 18% across all categories of breeding pigs, but was mostly due to a loss of 52,000 breeding sows (down 17% year on year). Sows in pig fell 14% to 189,000 head, while the number of gilts in pigs was down by 11,000 (28%). There was also a considerable reduction in the number of gilts intended for first time breeding, which contracted by 26% to just under 59,000 head. As highlighted in the latest outlook, the smaller size of the breeding herd is expected to lead to a drop in pig meat production in the second half of 2022.

Fattening pigs saw the least change, with numbers down by 1.4%, or 54,000 head on 2021. 

According to Defra data, 2008 marks the low point of UK clean pig slaughter over the past half-century. Since that turning point production has generally grown, proving to be remarkably robust, even during periods of sustained negative margins at the farm gate. However, that trend is expected to change in 2022, with a decrease in clean pig slaughter in the second half of the year.

The UK pork sector began the year facing severe headwinds; at that time, profitability for many was likely to have been negative for five consecutive quarters, and the situation has deteriorated since then. Already high Input costs have moved in only one direction, exacerbated by Russia’s invasion of Ukraine and the direct impact of that on supplies of agricultural exports from the Black Sea region. The estimated net margin in Q1 2022 was a loss of £58 per finished pig. The provisional estimated cost of production in May-22 was £2.40/kg deadweight, against an average SPP in the month of £1.76/kg.

More recently, prices in the EU and the UK have been strengthening. A genuine shortage of available clean pigs on the continent caused prices to rally. Processors and retailers have also been putting money into the sector, supporting farm gate prices.

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