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Bethan Wilkins

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AHDB Pork Market Intelligence

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Production costs and prices steady in third quarter

Home \ Prices & Stats \ News \ 2015 \ November \ Production costs and prices steady in third quarter

The cost of pig production in the third quarter of 2015 was little changed from the previous three months, according to latest estimates from AHDB Pork.

The average cost of production between July and September was estimated to be 139.5p/kg, around a penny higher than a quarter before. This was largely due to slightly higher feed costs, with most other inputs remaining at similar levels. Despite the small quarter-on-quarter rise, costs during the period were still close to their lowest point in five years and were over 4p/kg down on the same time last year.

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Pig prices were also little changed in the third quarter, with the EU-spec APP averaging 136.3p/kg. This meant that producers were estimated to be losing, on average, around £3 per pig sold during the quarter. This is the third consecutive quarter when producers have been losing money, following 18 months of profitability. However, losses are still much smaller than was the case for most of the period between late 2010 and early 2013. However, pig prices having fallen more recently, to stand at around 130p/kg in the first half of November, while feed prices have been fairly stable. Therefore, producer margins are likely to have worsened further in recent weeks.