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Proposed pay award will increase costs by over 40p a pig

by 5m Editor
14 August 2004, at 12:00am

UK - Proposed increases in agricultural wages will wipe 35,800 off the bottom line of a 580-sow unit, according to figures supplied by industry consultant Nick White of Pork Chain Solutions.

National
Pig
Association

National Pig Association
THE VOICE OF THE UK PIG INDUSTRY

NPA is active on members' behalf in Brussels & Whitehall, and with processors, supermarkets & caterers - fighting for the growth and pros-perity of the UK pig industry.

NPA has written to the Agricultural Wages Board expressing its concern. It says the proposed settlement will have a negative impact on the pig industry, which is struggling to gain viability and the confidence to invest, after more than five years of economic and disease crises.

It says the proposed award will increase costs by 40p to 60p per pig sold, or up to 1p a kilo deadweight.

"In the pig sector, the regulatory burden, and import competition are particularly intense. With the support of Defra, we are implementing a health and welfare strategy, which will improve our production efficiency and trading potential. However, all this requires investment, which will be significantly discouraged by the imposition of an unrealistic pay award," says NPA policy manager Ann Petersson.

She quotes two examples prepared by Nick White.

  • Unit A - 580 sows selling 20 pigs/sow/year. A 5% increase on current labour cost reduces net margin by 35,800, which equates to an increase in cost of production of 310.05/sow, 30.49/pig sold, or 0.68p/kg dw.

  • Unit B - 440 sows selling 24 pigs/sow/year. 5% increase on current labour cost reduces net margin by 34,701, which equates to an increase in cost of production of 310.68/sow, 30.45/pig sold, or 0.57p/kg dw.

The NPA points out that the pig industry generally pays well over basic rates to attract good staff.

Source: Digby Scott - National Pig Association - 13th August 2004

5m Editor