Britain's pig producers and processors face a bleak future unless better prices can be obtained, claimed a new report.
Threats to the industry from rocketing feed costs and almost static prices are likely to continue, said the report commissioned by BPEX, with contributions from banks ABN and Barclays.
The report came as Geo Adams closed its fresh pork processing plant at Boston in Lincolnshire with the loss of about 130 jobs. Adams' packing and slicing operation at this site had proved uneconomical. However two other units at the same location will continue production.
BPEX, formerly the British Pig Executive, is a subsidiary of the new Agriculture and Horticulture Development Board, which began operations on April 1 replacing five former levy bodies.
The BPEX report predicted production costs could be as high as 180p/kg by 2010, compared with 140p at present and an average of 108p in 2006. Feed accounts for almost half the price of producing a pig. With costs outstripping prices (expected to average 115p/kg in 2008), producers have been losing around £22 on every pig produced.
Barclays claimed that supply chain collaboration such as fixed price contracts, or sales contracts linked to commodity prices, could help ease the risk producers face.
BPEX chairman Stewart Houston said: "The report illustrates how the British pig industry remains under threat - without a price of 140p/kg pig, producers will continue to suffer unsustainable losses. This will see British pig producers leaving the industry for good."