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Outrage at BRC man's ignorance

by 5m Editor
16 November 2007, at 9:31am

UK - Comments made by Richard Dodd of the British Retail Consortium have provoked venomous anger in Britain's pig industry. The man is ill-informed with an understanding 'remote from the reality', says Independent consultant and NPA member Nick White - and he speaks for the entire pig sector.

In a letter to Mr.Dodd, he says that Dodd's recent statement in a radio interview for BBC North Yorkshire saying that "a significant proportion of the pig industry is doing perfectly well and supermarkets are supporting them", is so remote from the reality.

"Whilst I am sure that you will receive formal responses from the National Pig Association (NPA) and the British Pig Executive (BPEX), I trust that you will nevertheless read this and respect the views of someone with over forty years experience in the industry. For the last sixteen years I have been an independent consultant, following twenty-five years of managing pig units, and clearly the future livelihood of the supply/service side of the pig industry is directly linked to the need for a sustainable pigmeat price.

You claim that "pig producers' campaign for an urgent rise in prices is not supported by the facts", but in your statement you only quote one fact, and that is taken completely out of context, and, with respect, shows a complete lack of understanding of the current situation.

Your claim that "prices being received by pig farmers have increased 5% since February" is factually correct, but only on the basis that prices were at their lowest in February and then increased to a level that have remained fairly stable at around 108 - 109p (GB DAPP).

However, that completely overlooks the subsequent dramatic increase in global grain and other feed ingredient prices, and it is that feed cost increase which is the main factor behind the current plight of producers not only in the UK and EU countries, but also in other livestock production countries around the world.

Consumer support evident
Various surveys have clearly shown that a significant proportion of British consumers want to buy British produce, and that they are prepared to pay a little extra for it, in the knowledge that it is produced to the highest standards of welfare, traceability and food safety.

Your members know this, but whilst they continue to fudge the issue of clear and honest country of origin labelling, and import cheaper produce from lower standards when it suits them, the links in the food chain are continually being weakened.

Unless this issue is resolved by rewarding the primary producer with a reasonable margin over cost of production, then the inevitable consequence is that there will be a serious shortfall in production, and the global supply and demand situation will result in even more substantial price rises to the consumer.

The era of cheap food is over and the sooner you and your members recognise this and take a more responsible approach to the need for food supply chains, the better for the consumer. Some have already done this of course and are to be praised, but at present only one of the four major retailers (Morrisons) has made a commitment to sourcing only British pork - it is perhaps not surprising that this is the only retailer with its own slaughtering and processing facilities.

My services to producer clients include detailed physical and financial recording and monitoring, and I have recently spent much time preparing cash flows and "What-If?" scenario for clients, and can assure you that the industry's urgent need for a significant price increase is absolutely essential to prevent a major reduction in the UK pig herd.

A number of producers have already taken the decision to stop breeding, and in fact, if it had not been for the complication of FMD and the impact on cull sow slaughterings, would have started that process earlier. I personally know a number of producers who will be reviewing their situation in the first quarter of next year, and have stated that unless there is clear evidence of a sustainable price they will quit.

Clearly, it simply does not make sense to continue trading at a loss, and I am talking here of efficient producers who have weathered previous downturns in the industry by improving physical performance and cost reductions - the difference this time is that they are saying "enough is enough". I am almost daily hearing similar reports from others in the allied trades, and the term "meltdown" is frequently used.".



Conclusions
Mr White concludes with a personal pleas for Mr Dodds and his colleagues to establish the facts before making any more sweeping statements, and to concentrate on helping BRC members understand the seriousness of the situation.

He states that a sensible price increase now that is transparent and passed down the chain to the primary producer would help avoid the inevitable astronomical prices that will result from a major reduction in the supply base during the coming months.

A transcript of the BBC radio interview is listed on the news section of the NPA website

5m Editor