Q2 2022 Pork cost of production and August 2022 update

The latest AHDB quarterly cost of production and margin estimations have been published for 2022 Q2. These use the latest performance figures for breeding and finishing herds for the 12 months ending 30 June 2022. It indicates that the full economic cost of production for 2022 Q2 rose to an estimated average of 240p/kg deadweight, with pig margins per slaughter pig estimated at -£52 per head.

The estimated cost of production in 2022 Q1 was 207p/kg, therefore there was an overall increase of 33p/kg. Feed impacts the increased cost of production by 27p per kg. Changes in energy, fuel, interest rates and cull sow prices account for some of the other cost increases, as do decreasing carcase weights.

With pig producers experiencing continued negative margins since October 2020, it is estimated (based on the total pig slaughter numbers) that the industry has lost over £600m since October 2020 to the end of June 2022.

Spot compound feed prices have continued to ease slightly month on month since the May 2022 high. Assuming pig performance reflecting 2022 Q2, and considering the movement in energy, fuel, interest rates and feed prices since then; the August 2022 full economic cost of production is estimated at 223p/kg deadweight. With pig prices hovering around the 200p/kg mark, this still represents a continuing loss-making position for pig producers. A continuous loss-making situation for 22 months.

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