National Pig Association THE VOICE OF THE UK PIG INDUSTRY NPA is active on members' behalf in Brussels & White-hall, and with pro-cessors, supermarkets & caterers – fighting for the growth and pros-perity of the UK pig industry.

'Considerable restructuring has taken place through the British pork supply chain over the past two years, with the result that NPA, processors and retailers now have communication links in place to enable them to work together to create a sustainable industry,' said Stewart Houston, chairman of NPA producer group.

'Processors who, in the past would have imported cheap pigmeat to drive down the price of British pork, are prepared to pay a premium for British pork as long as their supermarket customers continue support this stance.'

The British pig industry's current guarded optimism for the future is based on foundations that have been laid over the past two years.

Responding to Curry

Responding positively to Curry's vision of a sustainable future for British agriculture, the NPA set out its plans to restructure the sector in its report 'Acid Test' published April 2002.

It has worked with the main sectors of the pigmeat supply chain to modernise the industry to meet the challenges of a global market. As a result…

• Communication and cooperation between retailers, processors and producers has been transformed.
  
• A growing number of producers and processors are locking into longer-term contracts.
  
• Increasingly retailers, processors and producers are working together to delight consumers with improved presentation combined with exceptional quality.
  
• Leading processors now accept that a simplistic policy based on low quality and 'every day low prices' is unsustainable.

'The proposition we put to government in Acid Test, and which was accepted by Lord Whitty, was that if the Curry vision for the future of farming couldn't be made to work with the pig industry, then it couldn't be made to work in any other sector,' said Stewart Houston.
'It is too soon to say whether we have proved that Curry does work but the omens are good as long as we can persuade supermarkets to continue buying on quality rather than price.'
Although producers needed a long period of stability before they could rebuild the national production base, many were now working hard to repair the damage of the past four to five years, he said.

Health and Welfare Plan

A significant problem facing British producers is the ongoing health challenge to the national herd - a legacy of under-investment, and overcrowding on pig units during classical swine fever and foot and mouth movement controls in 2000 and 2001.

Some producers, notably those who were not affected by the movement controls, have had few problems and are currently producing pigs profitably, but others continue to battle with infertility, PRRS and PMWS.

The British pig industry is planning to tackle this issue head on with a ten-year Health and Welfare Plan, which it hopes will be adopted and supported by Defra as an integral part of Defra's own Health and Welfare Strategy, which will seek to restore British livestock industry's worldwide reputation for excellence.

The pig industry Health and Welfare Plan, which is currently being considered by Defra, will likely require co-funding by government and producers.

Based on a pilot scheme in Scotland it will involve the monitoring of carcases going through slaughterhouses and an epidemiological survey, to build up a detailed national picture of herd health, followed by a drive to reduce some diseases and to eradicate others from the national herd.

The proposal for a pig sector Health and Welfare Plan, which has come from NPA, Bpex and the Pig Veterinary Society, has been welcomed by those producers so far consulted.

It is of little comfort that other countries are facing the same health problems. British producers accept that if they are to secure a future in a competitive global environment they will have to continue improving efficiency and productivity.

They are aware that they will hit a brick wall unless they dramatically improve the health status of the national herd.

Collaborative Benchmarking

In tandem with its drive to improve health, the pig sector has introduced a British pig sector benchmarking scheme which enables producers to (confidentially) upload their cost of production information and compare their own data with the aggregated data uploaded by other participating producers.

"The objective of the scheme is to provide farmers with the means to benchmark not only physical performance but also actual costs of production information," said Andrew Knowles of Bpex, who are running the scheme with support from NPA and the Red Meat Industry Forum.

Pig producers, said Stewart Houston, were increasingly coming to accept that their next door neighbours were not their competitors. "The benchmarking scheme is an example of how we are throwing off the shackles of past thinking and are increasingly prepared to work collaboratively."

He also listed a robust but more productive working relationship with Defra as an example of changed thinking on both sides. He particularly welcomed the way access to civil servants and ministers had improved.

Whole Chain Initiatives

Another critically important pig sector restructuring initiative involves producers, processors and retailers working together in whole chain initiatives.

An example is the LincPorc scheme which involves producers working closely with Lincolnshire-based processors George Adams, using agreed management techniques and 'designer' LincPorc genetics, to produce uniform high quality carcases of optimum value.

The scheme, which is already producing rewards of around £2 a pig for participating producers, will in due course link with a suitable retailer partner to provide a guaranteed supply of premium quality assured British pork.

'Pig sector leaders are keen to see more producers, processors and retailers working together in whole chain initiatives,' said Stewart Houston.

'An important element of such initiatives is the information that comes back to producers about ways of adding value to the benefit of the other links in the chain and of course to the end customer.'

So far there have been two tranches of a Bpex grant scheme which uses pig levy money to encourage integrated supply initiatives; both tranches have been fully subscribed.

'There is no doubt that most producers and processors are coming to accept the advantages of integrated supply chains.

'We are confident that in the fullness of time retailers will see the advantages of becoming more involved but at present there is still a tendency for them to want their cake and eat it. They want the advantages of a reliable supply of quality British pork but they are reluctant to lock into agreements because it would hamper their ability to use cheap imports as a mechanism to drive down prices.

'We are clear that the retailers must have a change of heart. If they don't, it will be impossible for us to deliver the Curry vision of a sustainable British supply chain.

'I would say that currently there are signs that for the first time ever we might be pushing at an open door - but it all depends whether the supermarkets are prepared to live up to their brave words and genuinely support the British pig industry.'

Pork Promotion

The final element in the pig industry's restructuring programme is to persuade consumers to recognise that pork is inexpensive, healthy, quick-to-prepare and versatile.

'Pork consumption in the UK is around 22kg per person per year compared with a European average of around 44kg,' said Richard Longthorp. 'If we can continue to work together to improve our act, we should be able to drive this figure up significantly.'

The All-important Caveat

Notwithstanding a slowly emerging air of optimism, the recovery of the British pig industry remained very fragile, warned Stewart Houston.

It relied on retailers continuing to support pig farmers, even though currently British pork was in short supply and more expensive than imported pigmeat from the continent.

'If retailers keep their nerve now, the reward in the future will be a reinvigorated, more competitive British pig industry, capable of providing supermarket customers with as much competitively-priced quality British pork as they need.'

At the beginning of the year he spoke to all the major supermarkets and they responded positively to as request for a period of stability to allow pig producers to start repaying debt and to give them confidence to plan future investment.

But in the light of the continuing differential between British and continental prices, both NPA and leading processors are concerned that the resolve of Tesco, and perhaps some other retailers, is wavering.

Stewart Houston argued that if retailers lost their nerve now and abandoned British pork in favour of lower-specification imported pigmeat, they would be signing the death warrant of the British pig industry.

Processors share his concern and some have urged him to do all in his power to convince supermarket buyers that their continued support of British pork is essential if the supply chain is to avoid melt-down.

Better prices for British pork this year have been driven by the recent strengthening of the euro against sterling, coupled with a shortage of supply and a desire - so far - by most retailers to proactively support British pork.

The weekly supply of slaughter pigs is down thirty percent, causing abattoirs to cut their kill, but the national pig herd is expected to start recovering next year if retailers continue supportive.

Honest Labeling

A recent pledge by Asda to clearly label imported pork with its country of origin was welcomed by NPA, which acted as peacemaker over Christmas when pig industry activists blockaded Asda distribution depots.

'Tesco have promised to do likewise with some Danish pork I found on their shelves the other day,' said Stewart Houston.

NPA chairman Richard Longthorp has pointed out that those processors and retailers who took NPA's advice last year and locked into longer-term contracts with pig producers are continuing to receive almost a hundred percent of their contracted tonnage.

Those retailers without the benefit of guaranteed supplies are urged not to undermine the British pig industry's recovery, or the national herd will revert to freefall.

'Firstly,' said Richard Longthorp, 'they shouldn't use imported material as a cover to cap or reduce prices for British product otherwise the current signs of increased confidence and investment will be terminally undermined. I am confident that those responsible for pork procurement at the retail end would not wish for, nor would derive any real benefit from, such a scenario.

'Secondly, if retailers do indeed decide to stock foreign pigmeat then I would urge them to follow Asda's lead and ensure that the product is clearly and correctly labelled and that it complies with UK welfare and environmental specifications and also with the additional specifications that most retailers lay down for British pork.'

Source: National Pig Association - By Digby Scott - 6th June 2003