A tightening of supplies and lower wheat prices are leading to some optimism in the beleaguered pig industry, according to the chairman of the National Pig Association (NPA).
However, in his new year message, Rob Mortimer warns that prices are still not high enough for most producers to cover costs, and 2023 must be the year when profitability and investment return.
He said: “The massive input inflation, particularly around feed costs, wrecked 2022 for many pig businesses, but that situation is improving.
“Wheat prices are down by £120/tonne from the May peak, although a lot of us have bought forward as we were worried about the market being short.
“The avian influenza outbreak has meant there is probably a million tonne surplus of wheat in this country, which has put pressure on the price.”
He added that buyers should not be tempted to slash pig prices because of the reducing cost of inputs.
“Although some people are making a little bit of money now, there are still a lot of producers out there who are haemorrhaging money,” he explained.
“People have not been able to invest over the past 18 months.
“If they don’t start investing in their herds again, they won’t have a lot longer left in the industry and we could see a further contraction.”
Mr Mortimer said the next stage of Defra’s review of contractual relations in the pork supply chain would be key in 2023.
“We had over 300 replies to the consultation – a lot of people put a lot of time into describing the situation industry is in, so with a bit of luck, we will get some decent outcomes on that – but it’s going to be a slow process,” he said.
“In the meantime, we need to have some more grown-up conversations with the supply chain to make sure that there is enough money in it for all parties.
“We all keep pointing fingers at each other, but the food chain is working on such tight margins, any little thing is pushing people over the edge.”
