UK pig producers raise concerns over contract terminations, weak prices

Independent British pig producers have taken their concerns to the country's agricultural supply chain regulator, saying that processor contract terminations, below-average prices and difficult contract negotiations are placing increasing pressure on parts of the sector.

The roundtable, organized by the National Pig Association and held earlier in September, brought together eight independent pig producers, each of whom had received notice from their processor regarding at least a proportion of their pigs, along with Agricultural Supply Chain Adjudicator Richard Thompson and representatives from the Department for Environment, Food and Rural Affairs, the NPA said in a statement Sept. 8.

The meeting follows an NPA member survey published Sept. 7 that found nearly half of respondents had been served notice on their contracts, with industry experts estimating that between 10,000 and 15,000 pigs could be hitting the market each week this autumn without a contracted buyer.

The producers set out in clear terms what the contract disruptions meant for their individual businesses, with some having already reduced herd sizes and one having decided to exit pig farming entirely, the NPA said in the statement.

Some producers also highlighted that the prices they were receiving were significantly below industry averages, resulting in financial losses amid the uncertainty created by contract terminations.

Contract concerns

The roundtable also highlighted concerns about how new contracts were formulated and negotiated over the summer, ahead of the Aug. 13 deadline for the Fair Dealing Obligations (pigs) regulations 2025, which require all pig contracts to be in writing and to comply with the conditions set out in the regulations, the NPA said.

In some cases, producers described the contracts being offered as convoluted and unappealing, but said they had no choice, given the lack of alternatives in the current marketplace, according to the NPA.

The producers also raised concerns about the time it had taken to receive sight of their contracts, the slow pace of the negotiation process and poor communication from processors, the NPA said.

Thompson, as the agricultural supply chain adjudicator, oversaw the Fair Dealing Obligations regulations that currently apply to the dairy and pig supply chains and are being extended to other sectors, according to the NPA.

The NPA said it had separately called on the Department for Environment, Food and Rural Affairs to deliver a dedicated support package for the pig sector.

The roundtable findings echoed the results of the NPA's July member survey, in which 14% of respondents said they were considering exiting the industry and 20% were considering or had already reduced pig numbers, with about 12% expecting to sell on the spot market after losing contracts.

Platts, part of S&P Global Energy, assessed the EU Pork Marker at €2,128/metric ton on Sept. 8, up €10/mt from the previous day's assessment.