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The future of the UK pig industry?

By Dr John Strak - At the end of February 2001, at the beginning of the foot-and-mouth outbreak, Dr Strak wrote his March 2001 monthly report which focused on the long-term position of the UK pig industry. Back in February 2000 he offered two scenarios for the future of the UK industry: a year on it looks like the pessimistic version might be winning the day
calendar icon 26 April 2001
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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.

"They think it’s all over..." is possibly the most quoted line in British football. How the UK ’s pig industry wish it could say the same.

As I write the latest Strak Report the news of the return of Foot and Mouth disease to the UK is just breaking. UK pig farmers may well be wondering just what they have done to deserve this further affliction, so soon after the East Anglia swine fever outbreak, and when continental producers are reaping the benefits of higher prices as a result of the BSE scare - and all UK pig farmers got from BSE was an extra feed bill.

Let’s use this month’s Strak Report to look at the long-term position of the UK pig industry, a topic I last discussed in the February 2000 issue of Pig World, and consider what state it is in to resist the latest blow to producers’ plans and their confidence.

Twelve months ago I looked at the long-term downward trend in the UK breeding herd over the last 25 years, and then extrapolated two scenarios – one optimistic, one pessimistic – for the industry to 2010. An updated version of the long-run trend and the future projection are presented in Chart 1. below.

Under the optimistic scenario I described last year,the sector would return to its long term trend and the national herd would climb back to round 710,000 sows by 2010. Under the pessimistic scenario, the sector’s long run trend behaviour was shattered by the events of 1998/1999 and the past no longer offers good guide to the future.

Latest breeding herd figures released by the MAFF in January do not lend much support to the optimistic scenario.The revised MAFF figures now record a breeding herd total of 610,000 sows in the UK as at June 2000:a downwards revision of some 15,000 sows on previously published figures.The revised data rep- resent a fall in the breeding herd of some 11.5% since the June 1999 census,and a fall of 7.9% since the December 1999 census. This is the second largest percentage fall over six month period for the last 25 years (the largest was between June and December 1998). It is also the second largest percentage fall over a year in the past quarter century and the largest June to June fall over the same period.

In my view, producers have good reason to question the accuracy of the December 1999 census results, which, to avoid "Millennium Bug" problems,was conducted in November in England.In my view,the 662,000 sows figure for the UK herd from that census overstated the herd size by a significant margin. My own estimate is that the herd was more like 620,000 sows at that time. This does not offer the UK industry much comfort. While we can discount the historically large percentage fall over the six months period, the sharp falls recorded over the June 1999 to June 2000 year seem robust. The contraction in the UK herd was a watershed.

MAFF will be publishing the initial December 2000 census results week or so after you read this. So what numbers should you expect to see? Well, given that retained gilt numbers fell by 16.1% between June 1999 and June 2000 (the highest percentage drop over a year since December 1998) I see little enthusiasm amongst UK producers to restock during the autumn, despite better prices towards the end of 2000. Overall, the tendency was probably to try and expand but the CSF-related movement restrictions in East Anglia will have led to a disruption in pig breeding programmes in key production areas as producers were unable/unwilling to buy replacement gilts and boars. These conflicting tendencies and confusions lead to a broad view of what is happening to the national herd.

The UK breeding herd at December 2000 will, in my view, be no greater than c.630,000 sows and gilts. This represents a maximum 3% increase in the herd since June 2000 or a small drop in the herd since December 1999 (on the official published data). But, equally, I wouldn’t be surprised to see a fall in the breeding herd to below 600,000 sows as a result of the Swine Fever disruption – a 3% fall would bring it down to c.590,000 sows. My forecast range is therefore, between 590-630,000 sows and gilts.

Looking to 2001, much will depend upon the severity and extent of the Foot and Mouth outbreak. Let’s hope it’s an isolated incident. But even if the outbreak is contained rapidly, as we all hope, movement restrictions could again delay restocking. A live export ban would affect not only direct pig exports, but a lot of UK lamb/beef would suddenly have nowhere to go but the domestic market. Producers could face further downward price pressure, just at a time when, as I argued in the last Strak Report, the pig price cycle is heading downwards anyway. None of these factors point to a recovery in the breeding herd (or in producers ’confidence which is prerequisite of an expanding herd).Getting the national herd heading back to the long term trend in 2001 seems unlikely.

A year on and two disease outbreaks later, I believe factors are pushing the UK breeding herd towards the pessimistic scenario. It isn't over yet but a weakened industry, with little opportunity to recover from (or government assistance with) the economic impacts of animal disease, doesn't look a good bet when the rest of the world’s pig industry (with profits restored and overdrafts reduced) is about to enter the next phase of the pig cycle. Keep that crash helmet close by.

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