UK pig industry becomes profitable after two years of losses

In a remarkable turnaround, the UK pig industry has clawed its way out of a prolonged slump, reporting profitability after grappling with two years of losses. With the feed, energy and fuel costs decreasing, the National Pig Association (NPA) says the standard pig price (SPP) has now reached a previously "unimaginable" 209.75p/kg after gaining 9.5p in just eight weeks.

The resurgence comes as welcome news to farmers and stakeholders who weathered a challenging period marked by market volatility, supply chain disruptions, and the aftershocks of the COVID-19 pandemic.

Analysts from the Agriculture and Horticulture Development Board (AHDB) said pig farmers were still losing an average of £17 for every animal in the fourth quarter of 2022 but during the second quarter of 2023, UK pig farmers have been making an average net margin of £22 per head.

This is the first recorded positive figure after 10 successive quarters of losses. driven by falling pig prices and record-high costs after feed prices skyrocketed when the war in Ukraine drove up grain prices.

Industry Rebounds with Vigour

After enduring a period of uncertainty, the UK pig industry has displayed its resilience, bouncing back with vigour. Experts attribute this remarkable turnaround to a combination of factors, including strategic adjustments, innovative practices, and a gradual restoration of global trade patterns.

The NPA is hopeful that the industry's recovery will continue to progress.

A representative stated: "The UK pig price shows absolutely no sign of slowing down, as it continues to be driven higher by a combination of ever-tighter domestic supplies and record prices across the EU.

"Combined with lower input costs, many producers are now starting to return a profit on pig production, although there is, of course, still a very long way to go to claw back the losses of the past two years."

Central to the industry's revival has been a series of market reforms that have redefined the landscape for swine resurgence. Streamlined regulations, enhanced support programs, and targeted incentives have all played a role in creating a more favourable environment for producers.

Moreover, shifting consumer preferences and increased demand for locally sourced, high-quality pork products have contributed to swine resurgence.

With consumers increasingly seeking transparency in food production and a focus on sustainability, many pig farmers have found opportunities to cater to this burgeoning market segment.

Navigating Challenges and Innovations

The industry's journey towards profitability was not without its challenges. Rising feed costs, disease outbreaks, and supply chain disruptions posed significant hurdles for pig farmers. However, these challenges also spurred innovation, as farmers explored technological advancements and sustainable practices to optimize production and minimize waste.

Precision farming techniques, biosecurity measures, and improved animal welfare practices have all become integral components of modern pig farming, allowing farmers to enhance efficiency and quality while meeting the evolving demands of consumers.

North Norfolk pig farmer Rob Mutimer, chairman of the National Pig Association, welcomed the return to positive margins and expressed sympathy with farmers of the UK pig industry who went bankrupt in those two years of losses.

He said: "It is very positive news after all this time but I am very sorry for those who didn't make it through all those months of negative margins. The number of pigs coming onto the market throughout Europe has dropped significantly and there are a lot of people who have gone out of business.

"So demand has outstripped supply, and it is keeping the price where it needs to be, which is encouraging. Everything now depends on the price of inputs, and what is going to happen with grain prices. I have never known so much volatility in my lifetime."

With the momentum gained from this turnaround, the UK pig industry is poised to continue its trajectory of recovery, further solidifying its role as a vital contributor to the nation's agricultural sector and ensuring a stable supply of high-quality pork for consumers both at home and abroad.