The pork market in the UK has enjoyed a few years of good prices since the last crash in 2021/22 where approximately 15% of the independent farmers went out of pig production. However, since August last year the price has been dropping fairly consistently with the drop since the turn of the year being an average of 1.2p/kg per week or to put it another way £13.68 less for the same pig in 12 weeks. According to AHDB we are now at breakeven point. The primary reason for this is that the EU pork price has crashed largely due to Spain getting African Swine Fever.
This directly affects us, we heard at the NFUS AGM in February that our current UK Government is prioritising cheap food - something sticks in our minds as we face further periods of geopolitical instability. At the same time, the limited to no border checks of imported meat continues, and the UK rapidly approved of regionalisation of pork from Spain as soon as it was announced that they had African Swine Fever in their wild boar population. This is a disease that has up to a 100% mortality in pigs, while it is not currently in the UK right now, we cannot afford complacency when it comes to protecting our national herds.
The availability of cheap meat from our nearest trading partner has peaked retailers and food services interest as they struggle to look away from the temptation of keeping prices competitively low. Food inflation is inevitable, we will monitor this closely, now more than ever we need the backing of our governments, processors, retailers and consumers to safeguard our future pork industry.
Over the last 20 years the UK has seen a slow creep to a more American system of pork production, which is the reliance on a small number of integrated processors with production in-house and away from an independent family farming business or cooperatives. More than 50% of the domestic production is now made up from processor owned pigs and four out of the five companies doing this at scale are non-UK owned. Historically it’s not been unusual for the UK to offshore the ownership of some of its most vital infrastructure/production, around 40% of UK infrastructure is foreign owned; Tata steel, Iberdrola S. A. (SPEN), EDF Energy to name a few. But when it comes to food security should we be more concerned about it? These are huge food processing companies that want to make profit, as any business does including family farms, but are they willing to do it at any cost?
There are rumours circulating the industry that notice to cancel supply has been issued on several independent family businesses by different processors in the last few months. I assume that this is a knee-jerk reaction because the processor cannot compete with cheap European meat that is being demanded of them by retailer and food services and have a surplus of loss leading UK produced meat. But are we going about this all the wrong way? Ultimately, demand comes from consumers, in or out of home, and in a cost-of-living crisis there is a temptation by the food service sector to source the cheapest option or risk losing to competitor. Yet we know consumers are loyal to local. 66% of consumers are more likely to buy pork if they know it’s grown in Scotland. There is also a clear opportunity for pork to satisfy the growing demand for affordable, nutrient dense, high protein products, as we see consumer habits changing as a result of GLP-1 medication and aforementioned cost of living crisis.
The sad reality is that the consumer may not currently know where their meat comes from. The country-of-origin labelling is so bad and confusing on food that consumers may think they are already buying Scottish, but they are not. Over 50% of consumers don’t feel they have enough information to understand the products origin. In the supermarket, if a product is processed in the UK using non-UK meat it can have a big UK processing stamp on it and “Origin: UK and EU” or “Produced in the UK using pork from the EU” in tiny writing on the back, from our ShelfWatch audit, 14% of pork products fell into this category. Elsewhere there is no requirement to inform the consumer where their pork is from. If labelling of food was more transparent, I believe the demand for Scottish would be so much clearer that the out of home sector and manufacturers would no longer be able to hide in the ambiguity of the currently regulations, thus offering better clarity and transparency for the producer and consumer alike.
The path of consolidation in the sector and prioritising cheap food risks domestic pork not being readily available in the future, and with that our domestic food security. At a time when domestic production of any product is being talked about in the press for national security reasons this to me is quite worrying. Shouldn’t the government step in to ensure domestic production is protected, prioritised and future proofed? We are only 50% self-sufficient in pork but with the right support could we be 100% self-sufficient? Possibly.
We have been clear that the first step must be consistent, robust border checks to protect our national herd. We also need trade agreements that prevent our market from being flooded with lower standard imports, and clear, consistent food labelling wherever consumers eat. There must be an extension of country foreign rules to minimally processed products. While the UK Government is making progress through the Fair Dealing Obligations, this effort will mean little if we do not urgently address the unfairness and risks facing the sector right now.