Dr John Strak Dr Strak's views on the UK and global pig markets are produced in Whole Hog every fortnight. For more details click the link at the foot of the article.

Despite the new Minister for Agriculture, Lord Whitty, telling Parliament that the prospects for the pig industry were "promising", the recent MLC Outlook paper indicated that there was a "general rundown". I think there is an urgent need to consider how bad the industry's problems are and what can be done about them. So, get ready for some direct, and uncomfortable for some, comments.

First let's put the latest data in context. Regular readers of the Strak report will know that I have tried to signal key changes in industry data when it occurs or even ahead of its occurrence. I even told my readers to make sure that they pinned up key industry charts to the back of the toilet door so that they would get a regular reminder of how their market was behaving.

The charts on breeding herd, slaughterings and pigmeat consumption that are presented here demonstrate in very clear terms to me that the UK pig industry is teetering on the edge of oblivion. Supplies are down, costs up, consumption is not improving.

In September 1999 Ben Gill told Pig World that he wanted to see one million sows in the UK rather than a contraction to possibly half that. Fine words but the herd is now down to c. 576,000 sows and will only recover in the June 2001census because farmers can't move their sows off the farm because of FMD. The herd has shrunk by an unprecedented 28% since December 1998. And remember, for almost all of the time that the UK herd has been contracting our competitors have been expanding. So, in relative terms, the UK experience is even worse.


As I noted in last month's Strak report imports of EU pigmeat went up 19% in 1999 compared with 1998 and in 2000 they increased by more than 25% for the full year. Half a million tonnes of pigmeat sold in the UK market lost to European competitors in just two years. This isn't a general rundown it looks like a complete meltdown.

The MLC Outlook paper on the pig sector noted that there had been a 14% reduction in pig slaughterings in 2000 (down from 14.4m to 12.4 million head) and the forecast was for a 13% reduction this year (down to 10.8 million). The 2002 forecast was for a slightly lower slaughterings level than 2001 at 10.7 million head. However, the MLC Outlook figures for pigs didn't show the decline in slaughterings between 1998 and 1999 - a 10% reduction. In other words there has been double digit reductions in UK pig slaughterings for three years in a row.


The 2002 forecast slaughter figure is the lowest figure recorded in my database which goes back as far as 1973. The next lowest figure for UK pig slaughtering was in 1975 when 12.4 million pigs were slaughtered. The recent MLC Outook paper also didn't mention that the MLC's forecast for pig slaughterings last year was 700,000 pigs above the actual figure. That forecast suggested we would see 13.1 million pigs slaughtered in 2000 and we actually got 12.4 million.

So what price the 2002 forecast which shows a stabilisation of the massive downward trend in slaughterings? What if it's another double digit reduction - to below 10 million pigs?

Unfortunately, unlike Lord Whitty, I can't see any positive factors that would halt this downsizing. The industry needs to factor in the effects of poor demand, low prices, high costs and PWMS/PDNS, and FMD on farmers' profits and production intentions this year if it wants a true picture of its prospects. A recent BPEX paper indicated that the cost impact of PMWS/PDNS is typically as high as 14p/kg for producers. It's also estimated that this illness affects all the major pig producing regions in the country - 30% of all English herds according to the vets. So costs have increased significantly for many producers.

Costs have also been increased because of the collapse of the cull sow market - wiping 7-8% off gross income in a pig unit. Meanwhile, and unlike the rest of the world, UK pig prices remain at or just above a "normal" breakeven figure. We could be heading for a fourth year of losses for the national herd. No surprise then to see the Outgoers scheme oversubscribed and the Ongoers Scheme under subscribed. It's even said that many of the Ongoers applications are from very large units which are prepared to take a 16% reduction in output for a few years just so they can access some cheap finance to keep the business viable. It's absolutely clear from all of this that we can expect no increase in the UK pig herd in the next few years unless something unprecedented happens. What does all this add up to?


In my view it adds up to a need for radical change. On the demand side, generic pigmeat promotion in the UK has never been shown to work and the industry can't afford to wait any longer for evidence that it might work someday. On the supply side, cost-increasing diseases or government regulations that make the industry uncompetitive need to be seen coming and avoided or mitigated in a more effective way than they have been.

From my comments here you will see that I think the industry is facing more than a general rundown, and the medium term prospects are not "promising". It's crisis time (again) but not a time to panic.

There will be a pig industry in the UK for some time yet as farmers retrench and find niche markets or ways of extending their depreciation and cost schedules over a longer period (remember dog and stick farming?). But these farmers will be increasingly disconnected from the industry as they find their own solutions and look after their own customers. Who can blame them? Even if the sector doesn't disappear though it will not be a healthy and profitable industry that is ready to play a part in the expanding European and global market for pigmeat. It's one thing to survive and another to be able to prosper.

See you next month.