Crunch time as pig farm incomes plummet to just £1k

Some East Anglian pig farmers are exiting the industry, says Peter Crichton Picture: ALEX FAIRFULL

Official government forecasts suggest all UK farm sectors except cereals will see a fall in their incomes this year, with pig farmers particularly badly hit.

According to the Department for Environment, Food and Rural Affairs (DEFRA) Forecast of Farm Business Income for 2018/19, pig farm incomes will plummet by 96% on last year from an average £31,300 to just £1k as a combination of lower pig prices and higher wheat costs take their toll.

Bury St Edmunds-based pig consultant Peter Crichton said he knew of one pig farmer in Mid Suffolk and another in South Norfolk who were exiting the industry as a result of the tough conditions, while others were feeling the strain.

MORE – Conference set to offer insights into farm businesses in lowlands of East Anglia

“It’s tough,” he said. “For the average pig farmer, whether it’s outdoors or indoors, most pig producers are either close to breaking even or losing money.”

Wheat prices had slowly risen from £136/t at the start of last year to about £160-16/t now, he said. Meantime, pig prices stand at about 137p/kg. As a rough rule of thumb, the pence per kg pig price must equal or exceed the same figure for the price of wheat in pounds sterling per tonne to move into profit, he explained.

“They are very fine margins,” he said. “Last year, we had a mixture of the Beast from the East followed by a very hot summer which hit conception rates very hard.”

He added: “We’ve had it worse – it’s not horrendous.” But Brexit uncertainty and the prospect of cheap imported foods were another factor, he said. A weaker pound would help, he predicted.

Meanwhile, cereal farmers are expected to see their incomes rise by 13% to £73k this year, according to the DEFRA calculations.

General cropping is expected to fall by 8% to £85k, dairy by 22% to £93k, lowland grazing by 29% to £16k, poultry by 45% to £53k and mixed by 10% to £38k.

National Farmers’ Union chief economics adviser Dr Andrew Francis said the decrease in income clearly highlighted just how exposed agriculture is to market volatility as he repeated NFU calls for an ‘orderly’ Brexit. “This year is set to be incredibly challenging for farmers and the continued uncertainty is already impacting farm businesses,” he said.

Alastair Butler, of Blythburgh Free Range Pork said it was a “really tough time for pig farmers” with his feed costs because of wheat prices and pig prices very low because of over-supply in Europe.

“The costs of pensions and minimum wage driving the cost of labour up all adds to the problem,” he said.

“There’s also real concern with Brexit around the corner that in a no-deal scenario the government will still allow meat imports without any tariffs in a bid to keep food costs down and despite the fact that exports to Europe will be tariffed.

“This would be very short-sighted as it would crush the UK livestock farming industry. We already depend too much on imported meat, to get out of Europe but then become more reliant on their farming industry would be crazy.”