Producers back in the red
Latest AHDB estimates of the full cost of pig production confirm that producers were, on average, losing money during the first quarter of 2015.
At 146.4p/kg, the cost of production was almost 7p higher than the average pig price during the quarter, equating to a loss of £5 per head. This is the first time that costs have risen above incomes since the first quarter of 2013 but before that producers were often in a loss-making position. By the end of the quarter, pig prices had fallen still further, pushing losses up towards £8 per head.
Estimated costs in the first quarter of 2015 were slightly higher than in the second half of last year. This was largely attributable to a modest rise in feed prices, although other factors contributed, including the low cull sow price, which increased the effective cost of replacement gilts. Nevertheless, costs remained 6p/kg lower than a year earlier and were towards the bottom end of the range experienced in recent years. This has helped limit the impact of falling pig prices on producer margins, for now at least.