September pork cost of production update

We continue to see movements in interest rates, feed, energy, and fuel prices. These will have an impact on pork cost of production.

Compound spot feed prices eased slightly during the summer but have increased slightly in September, although they have not returned to the peaks of May and June. Short and long-term interest rates have increased. Fuel prices continue to fluctuate, reflecting the movement in oil prices, but remain at an elevated level compared to 2021.

As a result, the full economic cost of production is currently estimated to be 224p/kg deadweight in September, assuming average technical performance as for the 12 months ending 30 June 2022. For September, SPP and APP are 200p and 203p/kg deadweight respectively. On a full economic basis, pig producers performing at an average level of technical performance will be losing £18 to £20 per pig slaughtered.

However, assuming the same cost base, pig producers performing at the same technical level as those in the top third[1], the estimated full economic cost of production is 194p/kg deadweight. This higher productivity should result in at least a breakeven situation or possibly a small positive net margin.

Since October 2020, when producers in the pig industry were estimated to have started making losses, the cumulative loss across all producers is now estimated at over £700m. This is calculated based on the overall average performance of the industry, the numbers of clean pigs slaughtered and the AHDB cost of production estimations.

[1] based on pigs weaned per sow per year for breeding stages and feed conversion ratio for rearing and finishing

Subscribe to receive pork market news straight to your inbox. Simply complete our online form.

While AHDB seeks to ensure that the information contained on this webpage is accurate at the time of publication, no warranty is given in respect of the information and data provided. You are responsible for how you use the information. To the maximum extent permitted by law, AHDB accepts no liability for loss, damage or injury howsoever caused or suffered (including that caused by negligence) directly or indirectly in relation to the information or data provided in this publication.

All intellectual property rights in the information and data on this webpage belong to or are licensed by AHDB. You are authorised to use such information for your internal business purposes only and you must not provide this information to any other third parties, including further publication of the information, or for commercial gain in any way whatsoever without the prior written permission of AHDB for each third party disclosure, publication or commercial arrangement. For more information, please see our Terms of Use and Privacy Notice or contact the Director of Corporate Affairs at info@ahdb.org.uk  © Agriculture and Horticulture Development Board. All rights reserved.