Pig producers hit by processor contract cuts have taken their case directly to the government and independent supply-chain adjudicator amid warnings that farmers could leave the sector.
Eight affected producers set out their concerns to agricultural supply chain adjudicator Richard Thompson and Defra officials at a roundtable organised by the National Pig Association (NPA).
Farmers described contract reductions, low prices and difficult negotiations with processors. They also warned of the financial consequences as thousands of pigs potentially lose contracted outlets this autumn and winter.
Direct evidence
NPA chief executive Lizzie Wilson said the meeting gave producers an opportunity to explain first-hand how recent market disruption was affecting their businesses.
“What was discussed was deeply concerning, as producers highlighted the impact on them and their businesses of the turmoil we are seeing in the marketplace, and, in some cases, the way contract negotiations have been handled.”
One producer at the meeting had decided to leave pig production altogether. Others warned they faced significant financial losses following contract reductions and prices they said were below quoted industry averages. The NPA estimates 10,000-15,000 pigs a week could enter the market without a contracted buyer during autumn and winter.
Contract concerns
Producers also raised concerns over agreements introduced to meet new Fair Dealing Obligations regulations, which came fully into force on 13 August.
Some described proposed contracts as convoluted and unattractive. But limited alternative outlets meant farmers often had little negotiating power. Concerns were also raised about delays in receiving contracts and poor communication from processors.
An NPA survey of about 50 producers found nearly half had received notice on contracts. The reductions covered between 15% and 100% of their herds.
Sector pressure
All four major processors – Cranswick, Pilgrim’s Europe, Sofina Foods and Morrisons’ Myton Food Group – had served notices on producers responding to the survey. Most reductions are expected to take effect during October and November.
Some farmers are already responding. The survey found 14% were considering leaving pig production, while 20% were considering or had already reduced numbers. The NPA is seeking government support as it warns that further contraction could damage independent pig production.
The roundtable also puts pressure on the adjudicator and Defra to consider whether current trading arrangements are delivering the fairer relationships intended by the new regulations. This works well as a numbers-led sidebar, complementing the main story rather than repeating the roundtable angle.