Pig production costs up by 20% while meat prices lag behind, report shows

An annual AHDB report that looks at the cost of pig meat production in 17 countries has revealed a 20% increase in GB costs for indoor pigs last year as opposed to a 6% rise in EU countries.

According to the ‘2021 pig cost of production in selected countries’ report, both the UK and EU countries experienced a rise in pig meat production costs compared to 2020. However, while average cost was up 6% in the EU reaching £1.50 per kg deadweight, UK costs rose by a staggering 20% to £1.79 per kg.

Meanwhile, The UK reference price of £1.50 per kg was 7% lower in 2021 than the previous year, resulting in negative margins for pig producers.

The marked increase in production costs in the UK pig sector can be attributed to the 20% increase in feed prices on average between 2020 and 2021, compared with the overall average rise of 9% in the EU.

AHDB lead analyst Carol Davis said: “2021 was a particularly difficult year for pig producers in the UK. Increased feed costs and lower pig prices, coupled with a backlog of pigs due to butcher shortages in abattoirs, all resulted in negative margins last year.

“And although pig prices increased significantly from April this year, they have not been sufficient to cover the continued elevated cost of production.”

Ms Davis added: “If GB indoor producers were achieving the EU average at breeding and rearing finishing stages on the same cost basis, they could reduce their 2022 Q3 costs of production from 227p/kg to 218p/kg.

“If all GB indoor producers were achieving the performance of the top third of GB producers, 2022 Q3 costs of production would be 198p/kg.”

The report has also revealed a slight increase in the number of pigs weaned per sow in UK indoor herds to 27.7 in 2021, which is still below the EU InterPig average of 29.7. In contrast, outdoor herds in the UK showed a small decrease from 24.4 to 24.3.

Whereas, the average number of pigs finished per sow in domestic indoor herds increased to 25.6 last year, staying below the EU average of 27.9.

As for the meat produced, indoor herds in the UK continued to produce over two tonnes of carcase meat per sow per year. To put that in perspective, the Netherlands achieved 2.99 tonnes of carcase meat per sow last year, making it the highest-producing country in the EU followed by Belgium and Denmark.

Please note the above stats exclude Italy, which produces heavy pigs for Parma ham.

The Pig Cost of Production in Selected Countries report can be downloaded from the AHDB website here.

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