Tough outlook ahead for UK pig sector

In a letter shortly before Christmas to the National Pig Association (NPA) chairman Rob Mutimer, Eustice said he believed animal welfare issues associated with the pig backlog were being addressed by the support package.

Extending support packages for pig sector

Eustice said the industry’s response to the butcher visas had been positive and suggested that, following a meeting with processors, he was considering extending the Private Storage Aid (PSA) and Slaughter Incentive Payment Scheme (SIP) to March 2022.

“Should these schemes be extended, the industry must do all it can to take them up to maximise the additional butchers coming in under the visa scheme and to clear the backlog,” he said.

Mutimer had asked the environment secretary to convene a roundtable meeting of processors, retailers and producers to discuss the crisis, saying there had been little obvious benefit from the support package so far. Very few butchers had arrived into the UK and there had been minimal uptake of the PSA and SIP schemes.

Pig industry losing millions per week

Meanwhile, the annual Andersons Centre forward look at the pig sector next year suggests the sector might want to change policy. Figures from the Agriculture and Horticulture Development Board (AHDB) show that on average producers lost £25 (€ 30) per head on finished pigs in the first half of 2021, meaning that the UK industry has lost a staggering £145 million (€ 171 million) or £800,000 (€ 946,000) a day.

The situation has escalated further in the latter part of the year with on-farm culling becoming a necessity due to labour shortages in the supply chain, which consultant Harry Batt described as “a crippling and unsustainable situation for the industry, with it likely to decide the fate of producers and processors alike.”

Batt said the latest challenge might be a step too far for some with margins at a 10-year low. In addition, producers are faced with rising input costs, including feed and also further investment to meet emissions legislation.

“This will signal the end for some, with a significant contraction of the breeding herd expected. However, others are in for tougher journeys having recently invested on the back of China’s ASF crisis.”

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Significant uplift in pig numbers slaughtered

Batt questioned whether the supply chain was aware of the significant uplift in numbers being slaughtered in the first 8 months of the year: “Is the CO₂ and abattoir labour shortage the problem or has it just exacerbated a situation that was already at a tipping point?

“As an industry, the focus has been on technical improvements to compete against our global and EU counterparts. Why? Are we ever going to displace imports or be competitive on a world scale? Brazil, Canada and the USA can produce a kg of pork for £0.90-0.95 (€ 1.06-€ 1.12), almost half that of the UK.”

He said the UK should look to capitalise on its integrated supply chain and retailer support by looking to produce carbon neutral pork, which would involve a radical rethink of the diet.