12 April 2019
The Welsh Government is investing £1.29 million to support and grow the pig sector in Wales.
Wales is only 5% self-sufficient in pigmeat so it believes opportunities exist in the sector, by establishing pig production as a core enterprise or a secondary diversification.
Menter Moch Cymru, an initiative funded by the European Agricultural Fund for Rural Development and the Welsh Government, in conjunction with Farming Connect hosted a series of meetings in Wales to help farmers consider the options.
Simon Davies of Meadow Quality and Anglesey pig farmer Paul Barcroft-Jones were there to share their first-hand knowledge of the sector and some top tips.
What are the options?
Contract finishing 7kg or 30kg weaners:
The current average cost of a 7kg weaner is £34.07 compared to £43.91 for an animal weighing 30kg or higher but the rearing cost for the smaller animal will be higher – from 7kg to finishing, total feed cost currently averages £61 compared to £45 from 30kg to finishing.
“A small weaner needs a more expensive diet but has a higher feed conversion efficiency and at 30kg or higher the pig has a lower feed conversion efficiency but its diet is cheaper,’’ Mr Barcroft Jones explains.
Providing bed and breakfast accommodation for a third party:
This arrangement involves the producer supplying and insuring the pigs with the contract farmer providing the accommodation, labour, water and bedding.
Expect higher rates for Freedom Foods certified pigs to reflect the lower stocking density but this could be absorbed by the cost of greater straw usage and other enhancements.
A buy-back contract:
The rearer buys pigs from a producer or ‘integrator’ at an agreed price and sells back to that supplier, also at a fixed price.
Mr Davies says this arrangement is becoming more commonplace as the pig industry becomes increasingly integrated but also because risk is shared between two parties; all profits and losses associated with the rearing period.
This agreement puts the rearing farmer in a strong negotiating position on price. “If an agreement can’t be reached on prices the farmer might decide to give it a rest for that crop unless the pig owner can revise the price.’’
Find a market before you invest
Historically farmers have been guilty of investing in infrastructure before securing a market but having a buyer in place first is vital, especially in regions remote from large processors such as Wales.
In 1990 there were 500 abattoirs in the UK registered to handle pigs but that has reduced to around 100.
“You have to pick up the phone, perhaps to a trading group like Meadow Quality or, if you are targeting a niche market, to London butchers and restaurants. It all depends on the type of pigs you intend to have,’’ says Mr Barcroft Jones.
“It is a lot of hard work - the first 12 months are the hardest - but it gets easier once you are established.’’
Of the UK’s total pig sales, 41 per cent are to groups and co-operatives like Meadow Quality, 31% to processor-owned plants, 17% to larger independent farmers and 11% to smaller independent farmers.
Mr Barcroft-Jones says April, May and June are the best months to start a new unit because demand for pigmeat is higher. “You are more likely to find a market in those months.’’
Standard Red Tractor v outdoor-born Freedom Foods pigs
There is a growing market for outdoor-born pigs – Freedom Foods pigs capture a premium of 20p/kg or higher.
“Outdoor-born premium has increased from 7-8p/kg in just 18 months,’’ says Mr Davies.
But for Mr Barcroft-Jones, fully-slatted, climate-controlled accommodation for 1000 growers is the way forward, reducing bedding costs, increasing feed efficiency and simplifying management.
Once completed later this year it will free up time to concentrate on his sows. “I might be able to gain one more pig a year from every sow, getting more pigs through the system,’’ he calculates.
Create a system that delivers optimum efficiencies
Costs are reduced if pigs are at the same stage of production because all journeys to and from the farm are minimised.
“If you are producing 220 pigs for bacon and have to trail to many outlets because they are at different stages of production it is going to add to cost,’’ says Mr Davies.
“It is better to send 220 out on one lorry when there is a 40kg specification between the lowest and highest at point of sale,’’ says Mr Davies.
“Don’t sell 10 trailer loads on 10 different days, think about an all-in all-out policy when you are not near a reasonably sized plant, not buying and selling a few around the place.’’
All in-all out allows for feed cost efficiencies, he adds.
“A feed supplier wants to deliver a reasonably full load of a reasonably consistent diet and for that they could offer a better price.
“You will add cost to the system if you have 40 or 50 pigs at different sizes on different diets as possibly more bagged feed will be needed. It also makes management more difficult.’’
And the fewer lorry movements the better it is for biosecurity.
Source progeny from a single supplier
Multi-sourcing can create disease challenges that negatively affect growth rates and margins.
Encourage contact between your farm vet and the supplier’s vet, Mr Davies advises.
“Direct dialogue between the two vets is crucial, your buyer will expect that and it makes good business sense.’’
It has never been easier to source from one supplier, Mr Davies adds. “Producers are scaling up and are batch farrowing so they have bigger groups of animals which they are moving every three weeks.’’
Buy from suppliers with a high herd health status.
“If you are starting from scratch you must be careful what you are bringing in in terms of disease,’’ says Mr Barcroft-Jones, who buys all his progeny as maiden gilts from Rattlerow.
When the herd is healthy fewer vaccines are needed and, as a consequence, production costs are lower, he says.
Work out your cost of production (COP)
Average COP across all indoor and outdoor systems is currently around 143p–145p/kg.
The top performing indoor unit can achieve a COP in the high 130p’s and outdoor in the mid to high 140p’s, says Mr Davies.
“Outdoor pig producers need a premium of 20p+/kg because of that higher COP but all producers need to see a fair return for stock and businesses to thrive.’’
Sows in top performing outdoor-born systems produce an average of 27.48 weaned pigs/year compared to 31.67 for indoor sows.
Feed conversion efficiency (FCE) of pigs on straw is less than in climate-controlled units and their feed requirement is higher.
Mr Barcroft-Jones says his biggest cost is feed.
“We have to use all dry feed because of our geographical location so I have got to make sure that my pigs convert this to their optimum.
“Our FCE target is to produce 1kg of liveweight from 2kg of feed.’’
PANEL
In Wales, the Welsh Government is funding Menter Moch Cymru to deliver support to farmers contemplating pig production.
The initiative is working with Farming Connect to provide information sessions and to signpost farmers.
“If farmers require follow-on sessions such as advice on housing we can arrange and fund these types of training sessions,’’ says project manager Melanie Cargill.
For farmers who want to take the next step, 80 per cent-subsidised business plans are available through the Farming Connect Advisory Service.