Producers Won't Recoup Losses until June

by 5m Editor
23 December 2013, at 6:28am

UK - At their current level, production costs are similar to those in December 2011 — but pig prices are around 24p higher than they were then.

Therefore, while producers were breaking even two years ago, they are currently experiencing positive margins of about £20 per pig, reports Stephen Howarth, for BPEX.

"Although this has allowed them to start paying back recent losses, the cumulative deficit over the last three years still stands at £95m. Margins will need to stay at current levels until at least the middle of next year for producers to back in surplus," he notes.

With global cereals markets unusually stable at present, the average cost of pig production in December was little changed from the previous month at 146.6p/kg, according to provisional estimates. This is down just 0.2p compared with last month but is 22p lower than a year ago, when costs were close to their all-time high point.