Could cost of production increase in 2017?
Read our latest analysis on the cost of GB pig production.
Last year we saw UK pig prices drop to multi year lows in early spring, which in turn led to a higher level of sow slaughterings. At the same time feed prices, which account for around 60% of the total cost of production, were lower. Nevertheless, on average, during these times UK pig producers were thought to be making losses.
While pig prices have been rising since then, the price of feed wheat, the most significant ingredient as an energy/starch source in compound feed, has also been rising. Furthermore, there is thought to be a strong correlation between movements in feed wheat prices and overall compound feed prices. With this in mind, feed wheat prices can be used to gauge the trend in compound feed price movements so far this year. Therefore, the continued rise of wheat prices since the start of 2017 is likely to have had a direct impact on the cost of compound feed.
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Millie Askew, Analyst
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