Levels of profitability in the British pig sector have been good for most of the last year, according to Mick Sloyan, Director of the British Pig Executive (BPEX), in his review of the industry at the British Pig and Poultry Fair at Stoneleigh yesterday, 13 May.
At the last event – two years ago – the UK industry was struggling to cover its cost of production.
“How the situation has changed!” said Mr Sloyan. In the last year, margins have been maintained and even improved with pig prices rising from the mid-140s pence per kilo up to 160p and on to a peak of 174p per kilo before falling back slightly. Feed costs – at least, wheat – have fallen over the last year, he said.
Improving Margins, Higher Exports
Many producers have taken the opportunity of the higher margins to invest in their businesses, leading to further improvements in efficiency and slaughtering improved. Carcass weights as well as numbers have increased so that UK pig meat production is forecast to reach 850,000 tonnes (carcass weight) this year – making this the sixth consecutive year of growth.
This new confidence is based on strong demand for UK pig meat both at home and abroad, according to Mr Sloyan. Ever more processors in both the retail and food service sectors are choosing British pig meat. Waitrose and Marks & Spencer committed to have British pig meat some time ago and more recently, Tesco and Morrison’s made the same commitment for fresh pork. Even discounters Aldi and Lidl, are coming to realise the strength of the UK to supply freshness, quality and traceability.
New technology – such as BPEX’s Stable Isotope Reference Analysis (SIRA) Tool – is combining with the Red Tractor assurance scheme to strengthen consumer confidence.
Mr Sloyan also pointed out the growing success of UK pig meat exports, with the opening up of the mainland Chinese market a significant milestone; exports of pork and pork products were worth £335 million last year. There are opportunities for exports to further markets.
Compared to other EU countries, UK pig producers have been able to maintain and even extend the premium for pig meat. So while EU prices have followed their usual seasonal fall and taken a hit as Russia imposed a ban on all EU pig meat, the impact on the UK market has been minimal. The result is a price differential between the UK and other EU countries of around 18p per kilo, worth more than £14 per pig.
Looking ahead, Mr Sloyan sees a positive outlook for the future. Feed costs for the coming year are forecast to ease and margins to remain positive, while demand for British pig meat at home and abroad are expected to stay strong.
“However, there is no room for complacency,” said Mr Sloyan on the challenges ahead.
Facing up to Disease Challenges
Top of the list is the threat of disease, with Porcine Epidemic Diarrhoea (PED) having dramatic effects in the US, Canada, Mexico, Japan and in other countries over the last year.
“We need to manage this threat as an industry,” he said.
A Disease Risk Round Table was held this week, organised by BPEX and the Pig Health and Welfare Council and including industry, vets and government. With the aim to determine what actions need to be taken, a series of recommendations were drawn up, including improved biosecurity, contingency planning and more communication about the disease risk. These will form the basis of a comprehensive plan to tackle the threat in the coming months.
New Five-Point Strategy: ‘Going for Growth’
Mr Sloyan explained: “We believe that the UK’s pig industry is entering a new phase and so we are launching a new strategy here at the Pig Fair. ‘Going for Growth’ sets out the strategic priorities for BPEX over the next five years.
“Our mission is clearly defined as to help English pig production and processing businesses become competitive and profitable
“We will deliver this though a five-point plan that focuses on the needs of the industry,” he added, which are:
• Close the gap: help industry improve its technical performance against its competitors
• Protect the Environment: getting over the message that the industry has reduced its carbon footprint by 24 per cent over the last four years
• Enhance pig welfare: protecting the industry’s well-deserved reputation in this area.
• Encourage safe and traceable pork: to maintain consumer confidence
• Help sell more pork: by rejuvenating the image of pork among consumers as well as encouraging them to look for the Red Tractor.
BPEX Team Restructured
The five-point plan will be delivered by a restructured team at BPEX, in which R&D and Knowledge Transfer team have been combined under the leadership of Andrew Knowles, while a new marketing team will be led by Kirsty Walker.
Summing up
“I am optimistic about the future for a number of reasons,” added Mr Sloyan, “not least in the new generation of young people coming into the industry.”
He introduced the first group of students following the pig industry scholarship at Harper Adams University, launched in 2013 by the National Pig Association (NPA) to recruit highly qualified and committed young entrants to the pig industry. The first four scholars and their sponsors were present.
Finally, Mr Sloyan announced the BPEX Innovations Conference at the National Agricultural Centre on 24 June, which will feature a number of international speakers.
