UK pig producers lost on average £9 for every pig sold in the first quarter of this year despite a drop in the cost of production.
According to industry levy body AHDB Pigs, during the months of January, February and March producers made an average loss of 11p a kilo or £9 a head.
Although the cost of production was down 6p a kilo in the quarter, compared with the last three months of 2015, to 129p a kg, the prices paid were lower resulting in a loss to farmers.
The cost of production, which was at its lowest level since before 2009, was driven by improved productivity and lower feed prices.
The average pig price was down 12p a kilo from the last quarter of 2015 to 118p a kilo.
AHDB Pigs said: “While feed prices have remained fairly stable, looking at the futures markets there is a chance that they will gradually increase over the coming months. With feed being a significant cost, this is likely to increase the cost of production even if productivity continues to improve.”
The industry body said that although average prices had improved to 119p a kilo in the week ending May 14, the average price for the second quarter of this year was still likely to be 1p a kilo below the 118p a kilo average in the first quarter.
“Unless pig prices significantly improve for the remaining weeks of the second quarter, pig producer margins may well fall further, to levels last seen in 2012,” added AHDB Pigs.
