UK Pig farmers face negative margins as sow herds set to fall in 2011

The average producer of finishing pigs in Britain at present is losing around UK£18 (US$29.96) per pig sent to market, despite a slight easing of production costs during March and April 2011 to around UK£1.60 (US$2.66) per kilogram carcass weight.

The size of the British pig breeding herd may slip below 418,000 sows (from 2007's 436,000 sows), causing pig producers to face a further period of negative margins, according to market analysts at the latest Outlook conference of the Agricultural and Horticultural Development Board.
UK sow numbers have already been hit by a 15% increase in slaughtering of sows in the first three months of 2011, although this had been expected after more gilts were added as breeding herd candidates in 2010. The debate among observers is whether extra productivity will allow pork supplies to be maintained, even with a projected decline in the population of sows in 2011.
The average producer of finishing pigs in Britain at present is losing around UK£18 (US$29.96) per pig sent to market, despite a slight easing of production costs during March and April 2011 to around UK£1.60 (US$2.66) per kilogram carcass weight. This follows annual averages of -UK£11 (US$-18.31) per pig in 2007 and -UK£8 (US$13.31) per pig in 2008, although there was a short-lived recovery to a profit of UK£11 (US$18.31) per pig in 2009 before negative margins returned with higher feed costs towards the end of 2010.
Calculations by the British Pig Executive showed losses averaging UK£22 (US$36.61) per pig in January 2011, rising to UK£25 (US$41.61) in February and UK£26 (US$43.27) in March before easing slightly to an estimated UK£19 (US$31.62) in April and UK£18 (US$29.96) in May.
On the basis of new forecasts for feed grain supplies and prices, industry representatives now think that production costs will not drop until at least the last quarter of 2011, while the average pig price paid to producers shows little sign of giving them a profit.