UK ex-farm feed wheat and feed barley prices have risen sharply over March, following gains in the UK feed wheat futures.
UK prices follow global price rises, rising in response to the war between Russia and Ukraine. The market is concerned about global grain availability. This season, Russia and Ukraine were set to account for 29% of the global wheat trade.
The EU Spec SPP (Standard Pig Price) has risen to and is now above the 5-year average for this time of year by 2p.
Estimated slaughter also rose, indicating that we are gradually processing the backlog of pigs, although average weights are currently over 5kg heavier than this time last year (meaning pigs have been kept on the farm longer).
Energy and feed prices have continued to rise and pig prices have failed to keep pace with the situation, leading to greater losses. Continued (sometimes regionally related) backlogs of pigs on farms, low pig prices compared to the cost of production, and increasing input prices, are resulting in very difficult decisions for many pig producers due to their need to continue managing their business risks and their business cashflow.
Some producers have already decided to either significantly reduce stock or stop pig production. This will be driven by the individual farm situation and resources, including the significance of pig production at a total farm level and whether they have other enterprises or diversification. This could lead to short or long-term supply issues for UK-produced pork.