ANALYSIS - Last week ThePigSite was in Stoneleigh Park for the UK's Pig and Poultry Fair. Opening the pig sessions for the day, Phil Woodall from Thames Valley Cambac and Meryl Ward, AHDB Pork, discussed the outlook for the UK's pig industry.
The UK's pig sector has been struggling over the last 18 months with negative margins for most of the industry. While production has increased, consumption has fallen, mainly due to the WHO report linking meat with cancer and also due to a retailer shift to reduced promotional activity, said Mr Woodall.
Mr Woodall went on to explain that many of the big supermarkets have seen a decline in sales and supermarkets such as Aldi and Lidl have been taking over, creating a move to everyday low prices.
There is also pressure from cheap imports from Europe and weakened currency.
With the current market conditions, Ms Ward noted the importance of matching supply with demand and therefore if we cannot sell a pig we should not produce it.
Opportunities for Growth
UK pork exports have experienced good growth. In 2015, the UK exported 58,000 tonnes of pig offal and this is expected to increase in 2016.
China has been a big driver in this export growth and with its rising consumption there will be potential for 5 million tonnes of exports, said Ms Ward.
UK products also sell for much higher prices abroad, which is partly due to the UK's reputation for having high pig welfare.
However, the high welfare standards means the cost of production is higher for UK producers, around 1.42 p/kg cold weight. This is very high in comparison to other European countries. For example Germany (1.22) and Spain (1.19).
We therefore need to look at these costs, said Ms Ward.
Mr Woodall added, the UK pig industry must be price competitive with the EU. We must improve efficiency, invest in new finishing accommodation and have heavier carcass weights if we are to compete.
In terms of opportunity for the domestic sector, the pig industry needs to adapt and innovate in order to meet the ever evolving consumer lifestyle driven needs.
It is now all about convenience, Mr Woodall explained. The average time spent cooking in an evening is now down to just 30 minutes.
Processors should also focus on savoury snacks as this seems to be the biggest opportunity area where new products can take hold.
There are also changing concerns with antibiotic reduction and Salmonella scoring. The industry needs to be clear on talking about these issues with consumers and reiterate the safety of our produce, said Ms Ward.
Looking at carcass balance will also help improve the UK's pig sector.
Both Ms Ward and Mr Woodall spoke about the big imbalance in how we use the carcass. They noted that we need more pigs to meet the demand for loins, but less for the shoulder.
However, they noted that the recent pulled pork campaign has helped shift these shoulders, therefore showing the importance and effectiveness of innovative marketing to drive the growth of the industry.
The industry now needs to find similar ways to increase sales of other difficult bits of the carcass.
Looking to the future, Mr Woodall said that he thinks UK pig production is likely to decrease with further herd exits/reductions.
Ms Ward also noted that other changes the industry should be aware of are keeping a focus on disease contingency planning, especially in light of Defra budget cuts and the growing support of country of origin labelling on processed products.
Read more of our Fair coverage and keep a look out on the website for our Innovation Trail interviews.
- Pig & Poultry Fair: Cooperation Needed to Increase Pig Industry Profitability
- Pig & Poultry Fair: New Technology Improving Pig Farm Performance