Organizations representing UK pig producers have called on Europe to consider more transparent pricing mechanisms and more robust contractual requirements to support the sector, highlighting the progress made in addressing issues within the dairy sector at an EU level as a potential model to deliver a more sustainable and balanced pork supply chain.
“Agriculture within Europe has already had to absorb the initial shocks of increased costs within the livestock sector without significant recompense from the market," said representatives of NFU Scotland, the Ulster Farmers’ Union and the National Pig Association in a letter to the European Commission. "No sector is more vulnerable to input feed costs than pig production. The EU has reviewed the operation of the milk market in Europe and intervened with new contractual standards and vehicles to empower producers. It is now imperative that a similar initiative is fast-tracked to underpin the EU pig sector."
According to the industry, in the present economic climate, producers face a perfect storm of cost escalation with no shelter from the competition of lower welfare systems and no significant support from the market. “Pig production has always been exposed to market forces with many producers now utilizing their own cereal resources or fixing costs through forward buying and contracts to smooth the effect of commodity movements on the production enterprise," said the letter. “That approach is becoming less viable as climate change drives extreme volatility in basic feed prices, and markets for pig meat are dominated by major retailers with the ability to control the market price at levels which are unsustainable."
Transparent price reporting should be in place throughout Europe, and maintaining an artificially low reporting price level is one factor that can stall the positive price movements that support production and provide a sustainable economic environment on farm, according to the organizations. In addition, "it is now essential that there are options for producers supplying the larger buyers or processors," they said. "It is not acceptable that animals are traded on a weekly offer price alone; there should be an option to supply through a contract, the price being defined by an agreed transparent pricing mechanism.
“This is a complex area, but it is crucial for EU consumers and producers that a sustainable framework is put in place to support the production of high welfare pig meat within the Union," said the letter. "Food security imperatives and food quality standards must mean that European pig meat is available through our retail network.”