Memorandum submitted by the Royal Society
for the Prevention of Cruelty to Animals (Pigs 13)
EXECUTIVE SUMMARY
1. A number of factors have contributed
to the recent problems faced by the UK pig industry; problems
that have affected the rest of Europe and beyond. High feed prices
are the primary cause of these difficulties, but the effect of
other factors, such as the restrictions on exports resulting from
the 2007 Foot and Mouth disease outbreak, should not be underestimated.
Higher levels of animal welfare in the UK, compared to the rest
of Europe, in certain areas of pig housing and husbandry can be
seen as a positive step, leading to market differentiation and
the opportunity for a stronger marketplace position for UK producers.
What is wrong with the pig industry in England?
Are present problems more than just a cyclical imbalance between
supply and demand?
2. It is not just the English, or even the
UK, pig industry that has been experiencing difficulties in the
last year/18 months. Producers in most EU countries have experienced
increased cost of production with little increase in the prices
paid to them from processors/retailers. As a result, the EU pig
herd has seen a reduction in numbers, with a fall of nearly 10%
in the last few months. Every country has reported contraction.
If this trend continues, it is predicted that by December 2008
the herd will be at its lowest for at least 20 years.1 This phenomenon
is also not unique to the EU; for example, the official statistical
agency in Canada reported that the number of pig farms in Canada
fell almost 20% in the one-year period ending April 1, 2008.2
Are domestic pig welfare standards a principal
reason that English producers have problems competing with those
outside the UK? Are there other reasons?
3. There are a number of factors that have
contributed to the recent problems facing the UK pig industry.
High feed prices are the primary cause of the current difficult
situation; feed is the single most important component in the
cost of producing a pig (around 45% of total costs).3 With feed
wheat prices up to £150-180/tonne from lows of £60-75
two years ago, the cost of production of pigmeat is approximately
£1.50/kg and the average pig price is currently around £1.15/kg,
as it has recently started to increase. However, on a 78kg carcass,
that difference leaves a £0.35/kg loss or a £27.30 loss/pig.
4. Feed prices have increased for a number
of reasons including an increased demand for food as global population
rises, relatively poor harvests, an increased demand for grain,
including wheat, in emerging Asian countries, such as China and
India, and also an increase in the demand for biofuel production
in the US and the EU. This has reduced the amount of raw materials
available for use in animal feed, thus increasing prices. Indeed
the pig industry itself, in the 2008 BPEX Pig Yearbook,4 states
that "Worldwide, the single most important factor influencing
prices in the next 10-20 years will be the continued expansion
of biofuels."
5. It should be remembered that producers
in the rest of Europe and elsewhere are also having to live with
the consequences of these increases in feed prices. However, the
recent weakening of the pound sterling against the Euro has meant
that imports are now more expensive and exports more competitive,
which may help to ease the pressure on UK producers.
6. The effects of the 2007 Foot and Mouth
Disease (FMD) outbreak on the current situation cannot be underestimated.
Prior to the outbreak, exports of pork, offal and breeding stock
were all increasing. When movement restrictions were put in place,
these valuable markets were temporarily lost, leading to additional
costs to the industry. However, it is thought that most of this
cost was borne by the slaughtering sector rather than producers.
7. Higher standards of animal welfare have
been cited, in the past, by some sectors of the industry as a
cause of higher costs of production and a reduction in the size
of the UK herd. Whilst it is true that Great Britain is the highest-cost
country in the EU, it is interesting to note that other European
countries, such as Sweden, have higher national welfare standards
than the UK in many areas (e.g. greater space allowances, ban
on the use of farrowing crates). Yet, their costs of production
are lower than in the UK.
8. The two major differences, in terms of
welfare, between the UK and the rest of Europe relate to the issues
of sow stalls and castration. The use of sow stalls throughout
the sows pregnancy was banned in the UK from 1999, whilst they
are still permitted in the rest of the EU (except Sweden) until
the end of 2013. However, even then, they will still be permitted
for the first four weeks of pregnancy. Whilst legal in the UK,
as in the rest of Europe, castration is not common practice in
this country; approximately 5% of male piglets are castrated in
the UK.5 The difference, in terms of cost, of castration versus
non-castration is unclear. Whilst losses may result from not castrating
in terms of a potential increase in condemnations at slaughter,
due to injuries from fighting/riding seen in older pigs, this
is unlikely to be comparable to the situation that would arise
in other EU countries should they not castrate. This is because
pigs tend to be slaughtered at a lower weight in the UK, so producers
experience such problems to a lesser extent. Also, any cost would
need to be balanced by the benefit of raising entire males, in
terms of improved food conversion ratios.
9. In terms of the cost involved in moving
away from sow stalls to loose-housed systems for sows, the RSPCA
commissioned independent research on this issue back in 2000.
The subsequent report6 concluded that whilst there was an initial
capital cost involved in converting buildings for loose-housed
systems, there were no ongoing running costs. The report concluded
that the average cost of alternative systems is less per sow than
stall systems, so producers replacing them with loose-housed systems
make a one-off saving. In 1999, the RSPCA joined with the British
Pig Industry Support Group to highlight this change in legislation
to the public and to promote the lack of sow stalls in the UK
as a point of difference from the rest of Europe. It should be
remembered that higher standards can bring a financial benefit
as they allow greater market differentiation and often command
higher prices at the retail level. The BPEX Pig Yearbook 20084
states that demand for British pork and pork products increased
in 2007-08, particularly in the premium sectors of the market,
suggesting that differentiation of products through higher welfare
production offers UK producers a stronger marketplace position.
This is supported by comments from Tesco's senior pork buyer,
at a recent European pig industry conference, that the best opportunities
(for growth and sales) in the future are in terms of differentiating
the premium tiers, which clearly involve welfare.7
10. It is interesting to note that the 2007
BPEX report The Impact of Feed Costs on the British Pig Industry3
does not make reference to higher standards of animal welfare
being a cause of the current crisis. A November 2007 special report
from BPEX stated that "The extreme and growing pressure on
the pig industry is due to the huge increase in feed costs following
the doubling of world wheat prices."8
What could supermarkets and the hospitality industry
do to alleviate the pressure on the domestic pig industry?
11. At present the UK is not self-sufficient
in pigmeat. We export certain cuts (e.g. belly and shoulder) and
import others (e.g. bacon and ham) for which there is high demand.
Greater rebalance of the carcass with more consumption in the
UK of the cuts which are currently in low demand would reduce
the need to export, and therefore potentially the need to import
so much pigmeat. Purchasing UK produced pigmeat, where available,
would also help. However, where importing from abroad, retailers
could also ensure that all pigmeat they source/sell is from production
systems that are at least working to UK legal standards (i.e.
stall and tether free).
12. As Government will be aware, unlike
for eggs and poultry meat, there is no legal definition to describe
and label pigmeat produced from pigs born/reared in different
systems, such as outdoors and free-range. The UK has much higher
percentage of pigs in these systems than in the rest of the EU
and evidence suggests that consumers in the UK are increasingly
seeking such products. Figures relating to chicken, have shown
that once consumers are aware of the different types of systems
available, they are more inclined to buy higher welfare products.
For example, as a result of the TV programme Jamie's Fowl Dinners,
broadcast in January 2008 on Channel 4, sales of higher welfare
chicken have increased and, more importantly, have been sustained,9
even in the face of the recent rise in food prices and the cost
of living. The RSPCA, in conjunction with pig industry representatives,
has been developing a set of definitions for different production
systems, notably "free-range", "outdoor",
and "indoor" or "barn". It is hoped that both
the industry and retailers will use these definitions. Support
from the Government, in terms of lobbying for marketing terms
legislation at a European level for compulsory pigmeat labelling,
would help to end the confusion amongst consumers, not just in
the UK but in the rest of Europe, as to the method of production
of the animals that produced the pigmeat they are buying.
13. In addition, there is also the issue
of price; the increase in feed prices has not been reflected in
the prices paid to producers for their pigs.
Can the Government do more to support the industry
either directly or through its public procurement policies?
14. Government could, indeed, do more to
support the industry, through the Public Sector Food Procurement
Initiative. Schools, hospitals and even the Houses of Parliament
tend to make purchasing decisions based on cost rather than on
quality or country of origin i.e. British. In a response to a
question from Lord Hoyle, on 3 August 2008 Lord Davies of Oldham,
responding on behalf of Her Majesty's Government, stated that
"All bacon purchased is Danish... the primary reason for
using non-UK-sources bacon is that, at current prices, Danish
bacon is three times cheaper than British bacon."10
15. Government also needs to be aware of
the potential impact of environmental rules on some types of pig
farming in England, notably free-range systems.
16. Government in England could also devote
a higher proportion of CAP modulation money to supporting the
health and welfare initiatives within the pig industry. Sadly,
in contrast with, for example, Scotland, there are almost no opportunities
for farmers in England to obtain funding for welfare-related initiatives
from this source.
REFERENCES
1 NPA website accessed 1 August 2008.
2 www.thepigsite.com (May 2008) Canadian Hog
Statistics First Quarter 2008. Available at: http://www.thepigsite.com/articles/7/markets-and-economics/2236/canadian-hog-statistics-first-quarter-2008
3 BPEX (September 2007) The Impact of Feed
Costs on the British Pig Industry. Available at: http://www.pigsareworthit.com/Feed%20Report%20V4.pdf
4 BPEX Pig Yearbook 2008.
5 PIGCAS (2007) Practice
on castration of piglets in Europe: Results of Work Package 2
in the EU project PIGCAS (2007-08), presented at the international
stakeholder workshop, Noordwijk, the Netherlands, on the 29-30
November 2007.
6 RSPCA (2000) Profit with principle: animal
welfare and UK pig farming.
7 Comments made by Andy Carter, Senior Pork Buyer,
Tesco, during his presentation at the European Pig Producers Congress,
5-8 June, Norwich, Norfolk, UK.
8 BPEX (November 2007) Campaign Update: A
special report on the campaign to raise pig prices. This feature
supplement was prepared for The Grocer by The British Pig
Executive and feature in 25 November 2007 issue of The Grocer.
Available at: http://www.pigsareworthit.com/BPEX%20Crunch%203pp_2.pdf
9 RSPCA Press release—Chickens:
the new revolution continues: New figures show "consumer
power" is still making a difference to chicken farming. Friday
23 May 2008.
10 House of Lords, Summer Recess 2008, Written
Answers and Statements. Lord Davies of Oldham, responding on behalf
of Her Majesty's Government, to a question (HL4891) from Lord
Hoyle, on 3 August 2008, relating to pork and bacon.
September 2008
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