Pig Producers Sacrifice Prices to Clear BacklogNeil Hardie
Brechin’s abbatoir is battling to clear a backlog of 15,000 slaughter-ready pigs which built up on Scottish farms after the plant closed for two weeks in January.
The priority for the Scottish Pig Producers co-operative, which accounts for the majority of the suppliers to the slaughterhouse, is to reduce the pressure on member farms, so producers are accepting heavily discounted prices in order to get stock moved quickly.
The plant closed at the end of January after employees tested positive for coronavirus but slaughtering facilities were already disrupted at other meat plants across the UK and the numb er of pigs ready for slaughter mounted rapidly.
The co-operative’s managing director Andy McGowan said heavy discounting is now taking place in order to find slaughtering space for pigs.
“At the moment we are not about pricing,” he said.
“We’d rather move the pigs and get farms back to normal and bear the financial consequences subsequently.”
The value of pig meat has fallen around 30p per kilo since its peak last year, with the price now hovering around 124ppk.
“It has been a sharp reduction but we are cautiously optimistic that it could be a short-lived slump,” said Mr McGowan.
“The European pig price is staring to go up, which might suggest the worst of the reduction is coming to an end. The backlog should be resolved in the next month and that should then coincide with reopening of hospitality and catering markets.”
One of the biggest implications of the virus outbreak is the loss of a valuable licence to export to China.
Latterly the Chinese market accounted for more than 25% of throughput, and the market offered outlets for parts of the carcase that are not in demand here.
“Our trade is based on trust so we surrendered the licence voluntarily and now that we’re designated clear (of the virus) by public health authorities we have reapplied.” said Mr McGowan.
“The timescale for that is out of our control which is a concern as it reduces the overall value of the pigs. Northern Ireland had the same issue last autumn and they got their licence back in November.
“We are following standard procedure, but in the short term it does create a problem.”
Another issue for pig producers is that feed overheads are rapidly rising with high prices for both grain and soya.