The outlook for the pork sector 2022

After a challenging and uncertain year, the outlook for the end of 2022 is more positive according to Pig Industry Analyst, Mick Sloyan. Those that have been affected by the ‘perfect storm’ will certainly be looking forward to the recovery of the industry.

Businesses that have been less affected by the wider market and have reported a successful 2021, have a more positive outlook, especially if the trend of buying local pork will continue in 2022.

The full article The Outlook for the pork sector in 2022 is available on the Menter Moch Cymru website – Menter Moch Cymru is a project that works with all sections of the supply chain to develop a more sustainable, profitable and robust pig industry in Wales.

The Menter Moch Cymru is funded by the Welsh Government Rural Communities – Rural Development Programme 2014-2020, which is funded by the European Agricultural Fund for Rural Development and the Welsh Government.

2021 was a challenging year for the Pig Industry throughout the UK. Generally, Wales was somewhat insulated from the wider issues but some producers still say margins under severe pressure.  This is explained by Mick Sloyan in the technical article seen in January’s edition of the Menter Moch Cymru newsletter:

“This was almost entirely due to the rise in feed costs and more recently energy costs, which had a negative impact in most parts of the World. It may be limited consolation but it could have been a lot worse for producers in Wales.  Support for local pork and pork products helped demand while pigs did not generally back up on farm as they have done in England and Scotland.”

The outlook for 2022 is for continued challenges to profitability in the first half of the year as feed and energy costs look set to remain historically high. But there should be some improvement in the second half of the year as prices will generally improve and feed prices will weaken somewhat.

Of course, two uncertainties will remain with the impact of Covid 19 on economic recovery and commodity prices around the world as well as the spread of the African swine fever.

As we look at the outlook for 2022 there are some factors which may improve pig prices and offset high feed costs.

Mick Sloyan explains: “The partial recovery of pig prices in China is encouraging.  While they are unlikely to return to the highs seen in 2020, the stronger market would result in more import demand.

“Any improvement in the EU market will relieve pressure on the market in Wales and England. There are also encouraging signs that the new normal in the wake of Covid-19 is generally having a beneficial impact on demand for locally produced pork and pork products which would be particularly good for producers in Wales.

“The UK still imports about 40% of all the pork and pork products consumed in the country from the EU and so the European pig prices has put considerable pressure on our market.  However, it is encouraging to see that a lot of this pressure has been resisted and UK average pig prices have not followed the EU to the same extent.  In the late summer of 2021, the UK reference price was over 40p/kg higher than in the EU.  While the UK price fell during the autumn it still managed to close the year at about 35p/kg higher than the EU.”

As we face 2022 the outlook is more positive and now is a good opportunity to have look at your current business and herd performance to ensure that you are operating as efficiently and as profitable as possible.  To aid businesses in doing this, Menter Moch Cymru and Farming Connect have recently launched a new free online Pig benchmarking programme as part of ‘Measure to Manage’.