Pay pig farmers a proper price for their produce to help with rocketing feed costs and to ensure a sustainable future for quality assured Red Tractor pork. That is the overriding message to the pig meat supply chain following the unveiling of a new report from BPEX, The Impact of Feed Costs on the English Pig Industry.
The report makes a detailed examination of the impact of the price of feed - the single most important component in the cost of producing a pig - on the English pig industry and provides the supply chain with a series of tangible actions to help meet the challenge of rising feed costs.
Escalating feed prices
The report reveals that the sustainability of the English pig industry is under severe threat as a result of escalating feed grain prices. Grain market increases pushed feed costs up by 30% - literally overnight - and they are still rising. The Russian and Ukrainian export bans, increased demand and extreme weather conditions across the globe have been cited as key drivers of this rise. Wheat is the main ingredient of pig feed. The cost of pig feed and the total cost of producing a pig are therefore highly sensitive to fluctuations in the prices of commodities such as wheat.
To make matters worse this latest hike in feed costs has coincided with a fall in the price paid for a finished pig, measured by the Deadweight Average Pig Price (DAPP).
With no sign of a let up in feed cost rises the industry needs to act now. The solution, as laid out by BPEX in its report, is for the pig meat supply chain to adopt this three-point action plan:
- Increase the DAPP
- Support English high welfare pig meat production
- Adopt total supply chain co-operation
BPEX Head of Marketing Chris Lamb said: "We have outlined three key strategies to help the English pig industry avert a crisis similar to that which plagued us in 2007/8.
"First, the industry must respond by increasing the DAPP. The only sustainable solution is for farmers to obtain a higher price for their pigs. Second, we need to remind retailers of the importance of supporting English/Red Tractor pigmeat production with its high welfare and quality assurance standards. And finally, the whole supply chain needs to pull together to ensure a profitable production sector and that the industry continues to meet demand for quality, farm assured product, such as pork which carries the Red Tractor logo.
"The message we're taking to industry with this new report is clear: failure to act in the face of this challenge from high feed costs could have a devastating impact on pig production in this country. It's no exaggeration to say that the sustainability of the English pig industry is at stake.
"It is critical that we learn the lessons from 2007/8 when the industry faced wipe-out. The highly successful Pigs Are Worth It! campaign, which encouraged retailers to pay a fair price to farmers, was credited with saving many producers from going to the wall. The campaign has a role to play in 2010 because we are still passionate about our industry and firmly believe that Pigs Are Still Worth It!"
The publication of the report coincides with the launch of a new campaign website - www.pigsarestillworthit.co.uk
- where the document can be downloaded in its entirety. The Pigs Are Still Worth It! website provides industry with a one-stop shop, featuring news and information relating to the 2010 campaign to support English/Red Tractor pigmeat production. The website also features a link through to the original campaign website.