ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

Pig Production in England

by 5m Editor
6 August 2007, at 12:00am

A Farm Business Survey by Aksham Bryan College. This report is one of a series being produced based on the results of the Farm Business Survey (FBS) for England. The annual Farm Business Survey is the most comprehensive and independent survey of farm incomes and provides a definitive data source on the economic and physical performance of farm businesses in England. It is conducted by a Consortium comprising the Universities of Cambridge, Newcastle upon Tyne, Nottingham and Reading, and Askham Bryan, Duchy and Imperial Colleges. The Consortium is lead by the University of Nottingham and its members work in partnership, using uniform and standard practices in reporting on their findings to ensure consistent data quality, accuracy and validity. The Survey is financed by Defra and the Consortium values greatly the input of their staff.

Summary

This report presents the results collated from those farms with pig enterprises in the 2005/06 Farm Business Survey. Typically they relate to farm businesses with financial year ends between December 2005 and April 2006. Most of the data is drawn from those farms defined as Specialist pig farms, that is, more than two-thirds of their output is derived from pigs.

Census data indicates that the UK pig population has declined by 36% during the last ten years. There has been a 35% decline in pig meat production during the same period. The rate of decline has steadied in recent years and the 2006 census data shows a slight increase in the total number of pigs compared to 2005.

Falling numbers has inevitably had a major impact on the percentage contribution made by home produced meat to total supply. Pork production as a percentage of supply has fallen from 104% in 1995-97 to 62% in 2006. Imports have increased nearly three-fold in the same time period. Bacon and ham production as a percentage of supply has fallen from 51% to 44% in the same time period. However, since 2001, this figure has been relatively stable and the level of imports has not changed dramatically during this period.

Pig prices fluctuated considerably during the late 1990s following the typical so called ‘pig cycle’. This was followed by a period of very low prices resulting in very heavy losses in the sector and consequent decline in pig numbers. In more recent years the monthly pig price data is noticeably much more stable. In the period 2004-2006 prices have fluctuated by only a few pence on a monthly basis. The average annual price for 2004 and 2005 was 103 pence and in 2006 it was 105 pence per kg. This has brought a period of much needed stability to the sector.

The full sample of 60 Specialist pig holdings recorded a gross margin of £135332 after deduction of variable costs amounting to £149964. Feed costs accounted for 79% of total variable costs. Fixed costs amounted to £122233 resulting in a Management and Investment Income (MII) of £13099. Net Farm Income (NFI) was £29043. There is always a great variation in profit performance between farms and it was noticeable that one-half of all farms showed a negative MII figure and one-quarter showed a negative NFI figure. The top 25% show a MII of £76872 whilst the bottom 25% show a negative MII of £30490. The high MII farms are significantly larger than the others with a pig output 77% more than the middle 50% band.

This report has presented for the first time data on net margins for pigs derived from the FBS. On the full sample of 60 Specialist Pig Farms there was a net margin of £15804. This average figure masks a huge variation in performance with 43% of farms showing a negative net margin result. The highest net margins were recorded by those farms selling weaners. Indeed, on a per £100 output basis their net margin was four times higher than those farms selling fat pigs.

During the period covered by this report feed prices were comparatively low and stable. In 2006/07 there has been a considerable rise in cereal prices (since August 2006) which has not been fully compensated for in terms of a rise in pig prices.

Chapter 1

Economic Background

The purpose of this chapter is to collate relevant pig data for the UK. Data has been presented for the years 1995 to 2006. The following figures clearly portray the dramatic structural change that has taken place in the industry during this period.

Pig slaughterings

Tables 1.1 and 1.2 show the figures for pig slaughterings in UK abattoirs each month for the period January 1995 to December 2006. For the period 1995 to 1998 clean pig slaughterings increased but since 1998 the numbers killed has declined substantially. Indeed, from the peak in 1998, the total number of clean pigs slaughtered has fallen by 43%. The rate of decline has fallen in recent years with 2006 slaughterings being less than 1% lower than 2005. During 2001 slaughterings were affected by the Foot and Mouth Disease (FMD) with some 436000 pigs slaughtered which did not enter the food chain and therefore not included in the figures.

The figures for sows and boars generally match those of clean pigs except that in 2001 there was a sharp decline in slaughterings due to the impact of FMD. It is also noticeable that in 2005 there was a 16% fall in slaughterings compared to 2004 and a further fall recorded in 2006.

UK Pig Population, Production and Prices

Table 1.3 shows that the pig population in the UK has declined by 36% during the last ten years. There has been a 35% decline in production of dressed carcase weight during the same period. This is less than number of pigs killed (marketings), which declined by 41%, due to an increase in the carcase weight. Average carcase weight in 2006 was 75kg, a rise of 12% on the average weight in 1995-1997. The value of production has fallen by 45% due to a combination of lower prices and reduced numbers. Price levels were much higher in 1995-1997 compared to 2006. The rate of decline has steadied in recent years and the 2006 census data shows a slight increase in the total number of pigs compared to 2005.

UK Supply and use of Pork and Bacon

Table 1.4 shows the impact on the falling numbers on the percentage contribution made by home produced meat to total supply. Pork production as a percentage of supply has fallen from 104% in 1995-97 to 62% in 2006. Imports have increased nearly three-fold in the same time period. Bacon and ham production as a percentage of supply has fallen from 51% to 44% in the same time period. This figure has been relatively stable since 2002 and the level of imports has not changed dramatically during this period.

UK Pig prices

Table 1.5 shows the pig prices for the period 1995-2006. During 1995-1997 prices were both high and fluctuated considerably from month to month. For the next two years there was a period of very low prices resulting in very heavy losses in the sector and consequent decline in pig numbers. In more recent years the monthly pig price data is noticeably much more stable. In the period 2004-2006 prices have fluctuated by only a few pence on a monthly basis. The average annual price for 2004 and 2005 was 103 pence and in 2006 it was 105 pence per kg.

Figure 3 Average Pig Prices 1995-2006

To view the full report, please click here

July 2007