Pressure and profitability for pig and poultry producers

Pig producers remain well-placed to meet consumer needs – despite a challenging market which has seen some farmers served notice on their contracts.

The decision by retailer Morrisons to call time on an unspecified number of contracts cast a shadow over last month’s Pig & Poultry Fair. But a steely determination remains among producers determined to see better times ahead.

Falling prices, oversupply and factory failures have seen some pigs kept back on farm. But there is only so long stock can be kept before failing to meet specification and becoming uneconomic.

Fabio Brancher, operations director at Pilgrim’s Europe, outlined how the processor is working to reduce the slaughter backlog, opening nine additional factories in March to ease pressure on the congested supply chain.

The business slaughtered a record 48,000 pigs during the second week of May compared with its usual target of 43,000, Mr Brancher told visitors to the fair at the NEC Birmingham on 13-14 May.

Swine fever

Concerns around African Swine Fever remain high within the sector, with the industry continuing to strengthen contingency planning. Increased vigilance against illegal imports at UK borders is seen as vital.

Hundreds of tonnes of unchecked imported pigment are continuing to come into the country. National Pig Association chief executive Lizzie Wilson said the sector was lobbying the government on the issue.

“We are still waiting for the government to provide a plan, but it still hasn’t. In the meantime, we’ve been carrying out simulation exercises with the whole supply chain and working through contingency plans if it happened tomorrow.”

Consumer demand for high-quality animal protein is rising – particularly where it is affordable and convenient. But tightening animal welfare legislation and restrictive planning policies are hampering sector growth.

ABN commercial director Tessa Seymour said: “Bringing the supply chain together is so important – to help foster understanding and encourage collaborative approaches to overcome hurdles and make the most of the opportunities available.”

Poultry and eggs

Egg consumption has risen by 20% since 2019 but remains behind many other countries on a per-capita basis, said Barney Kay, agricultural director at Noble Foods.

Organic and golden yolk brands are doing well. So too are processed products. But proposals to phase out colony systems and restrictive planning policies will make it hard to keep up with demand.

“We’re seeing a huge influx of Ukrainian eggs,” said Nick Allen, chief executive at the British Egg Industry Council. “If you’re going to ban systems of production in this country, you have to ban imports produced to those same standards.

“The regulatory environment is in flux all the time – there’s no stability,” added Mr Allen. Employment, tax, health and environmental departments don’t talk to each other, so one policy ends up undermining another. “We need a joined-up approach.”

Avian influenza is another significant threat. There is hope that a vaccine trial in turkeys will prove successful, said Mark Gorton, of Traditional Norfolk Poultry. “But it’s worldwide problem not a UK problem, and it won’t be an overnight success.”

Trade barriers

Removing trade barriers would enable more widespread use of the vaccine, suggested David Neilson, agriculture director at Avara Foods. “I wouldn’t be prepared to grow my Christmas turkey business without the vaccine – it’s not worth the risk.”

Many producers remain keen to invest – but they need the confidence and cash flow tp do so, said Sam Drummond, director of poultry at EC Drummond. “It’s very hard to expand – planning permission is our biggest challenge.”

Another area of both challenge and opportunity is the food service and public procurement sector, said Mr Gorton. “We’ve got products like wings and drumsticks that we struggle to sell – the procedures and protocols are so restrictive.” But rather than serving Chinese chicken in schools, they should instead be signposted to high-quality, local value cuts.