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Pig farmers take heavy losses due to rising feeding expenses

Belgium and the United Kingdom are sending alarming signals about the financial situation in the pig sector. Rising costs are not offset by higher revenues. Short-term improvement is not to be expected.

English pig farming has to deal with the worst results ever. The loss was approximately £24 per pig in the second quarter of 2021. During the first quarter the results were equally disastrous. This leads to additional stoppers or bankrupt companies in the sector.

The negative development is mainly due to rising feed costs, as there are rising and high prices for cereals and oil raw materials worldwide. At the same time, both labour costs and fixed costs on the British island increased compared to the first quarter.

Remarkably, pig prices rose slightly in the course of 2021. The average price in the second quarter was around 1.32 euro, an increase of almost 8 euro cents compared to the first quarter. However, prices have fallen by more than 11 euro cents compared to 2020. Analysts look carefully at the developments, because the period of deep loss rates continues for a long time and there is little prospect of improvement. Compared to these calculated results, a good feed procurement strategy can lead to lower losses. The rising labour costs have to do with higher inflation in England due to Brexit and the difficult availability of labour for the pig sector.

The same signals are coming from Ireland about the particularly bad developments. This despite successful exports and relatively high prices for pork. However, the increase in feed costs in particular is so severe that pig farmers are 5 to 10 euro cents per kilo short.

The Belgian press speaks of pig farming as a sector in need. During 2021, feed profits on sows and closed farms decreased. The low piglet prices ensure that the feed profit on the pig farms is significantly negative towards zero. However, the margin per fattening pig remains significantly negative.

Paolo Sorbello

Paolo Sorbello is a journalist and researcher. He is a PhD candidate at the University of Glasgow, studying state-business relations in Kazakhstan, Kyrgyzstan and Russia. He is also the Business News Editor of the weekly newspaper The Conway Bulletin.

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