Farming News - COP reaches 240p/kg, highlighting need for further pig price rises
COP reaches 240p/kg, highlighting need for further pig price rises
The average cost of production for pig producers reached 240p/kg in May, up a further 10p from the April figure as costs continue to soar.
AHDB's latest estimate compares with 230p/kg for April and the average Q1 figure of 207p/kg, as feed, energy and fuel prices have significantly increased since then.
"With May feed prices increasing and energy and fuel increases beginning to bite, the full economic cost of production is currently estimated to have reached 240p/kg deadweight in May, assuming the same technical performance as for the 12 months ending 31 March 2022," AHDB analyst Carol Davis said.
"May compound feed prices have increased further but forward prices, feed ingredient and future grain prices are all indicating that we just might have reached a feed price peak, although this is at an elevated level and this opinion cannot be guaranteed. There is still a long way to go for UK and global planting results and harvest outcomes."
The last few weeks have seen a steady in the wheat price, on the back of discussions about getting more wheat out of Ukraine and other market fundamentals - AHDB was today quoting feed wheat for July at £288/tonne, compared with a peak of beyond £350/tonne in mid-May.
More pig price rises needed
The pig price is continuing to rise, with the SPP for the week ending May 28 standing a record 176.73p/kg, up 0.78p from the previous week. But, it remains a long way short of the soaring costs of production.
The NPA is continuing to call on processors and retailers to do more to shift the pig price further up towards the cost of production.
The NPA's Lizzie Wilson said: "Whilst the pig price has increased incrementally, and contribution prices now sit between 173-190p, the yawning gap between what producers are being paid and what it actually costs to produce a pig is more apparent than ever.
"There is no sign of any further, desperately-needed, significant increases any time soon. In addition there is still a backlog of pigs impacting many producers businesses. We need more support, from both government and retailers, if the pig sector is going to survive."