UK processors terminate contracts with pig producers on a large scale

Between 10,000 and 15,000 pigs per week could enter the UK spot market this autumn without a contracted buyer as processors terminate supply agreements. According to a survey by the National Pig Association (NPA), nearly half of respondents had received notice that contracts covering all or part of their pig supplies would be terminated.

Producers also report receiving prices significantly below industry averages. The combination of weak prices and uncertainty over future sales is already prompting some farms to reduce herd sizes, while one producer who participated in a recent NPA meeting with government representatives has decided to exit pig farming altogether.

Contract concerns have intensified following the introduction of the new Fair Dealing Obligations regulations. Since August 13, all pig supply contracts must be in writing and comply with the new requirements. Producers have raised concerns about complicated contract terms, lengthy negotiations and a lack of alternative buyers.

The scale of the pressure was also highlighted by an earlier NPA survey, in which 14% of respondents said they were considering leaving the industry, while 20% were considering or had already reduced pig numbers. Around 12% expected to sell pigs on the spot market after losing contracts.

Against this backdrop, the NPA has called on the UK government to introduce a dedicated support package for the pig sector. Meanwhile, the Platts EU Pork Marker was assessed at €2,128/t on September 8, up €10/t from the previous day.

Tags: pork, UK, pig, livestock sector