Pig farm incomes forecast to recover
The average Farm Business Income (FBI) for specialist pig farms in England is seen to have more than doubled in 2016/17 year on year, from £21,600 to £57,000, according to the latest forecasts from Defra.
The increase will have been welcomed by specialist pig producers, who have seen farm business incomes falling since 2013. A rise in pigmeat prices, driven by a combination of weaker sterling and tighter supply, is behind the increased forecast. However, although weaner, cull sow and store prices have increased, feed costs have risen too ( see: http://pork.ahdb.org.uk/prices-stats/prices/feed-commentary ). Understandably not all producers will benefit from the forecast increase in farm business equally, as contracting terms differ across the sector; the wide representation of contract rearers is reflected in Defra’s forecast and it is assumed that this portion of the market will not benefit from the rise in pig prices.
The increase of 163% is the largest for any type of farm covered by the survey, which sees most sectors recovering from 2015/16. However, specialist poultry and dairy farms are expecting to suffer from a fall in egg and milk prices respectively. Lower cereal yields have been offset to some degree by higher prices, while input costs overall are forecast to remain relatively unchanged. For comment on Lowland and LFA grazing livestock incomes, please see this week’s Cattle and Sheep Weekly publication.
Duncan Wyatt - Lead analyst