Analysis: Doubling price of pig food takes its toll on a struggling industry

Trying to look on the bright side, the news that the company is entering a 90-day consultation period provides time in which some compromise might be worked out. The pig sector is in decline. It was worth about £190 million last year, but is now only half the size it was a decade ago. Pig farming has always been susceptible to economic highs and lows and agricultural students have been taught for generations about the “pig cycle” which sees profitable periods followed by equally unprofitable ones.

The current economic low in the industry is largely based on the doubling of cereal prices in the past two years. Grain forms a large part of the modern pig’s diet and feed costs amount to more than two thirds of expenditure for producers.

So even though pork prices have risen by 4 per cent in the past 12 months and demand for Quality Assured Scottish Pork is strong, there are few producers who are making money.

Apart from its prominent position in the processing sector, the Vion Group, owners of Hall’s, are the biggest producers of pig meat in Scotland; a legacy of its takeover of the Grampian Country Food Group, the company set up and owned by Fred Duncan.

With a number of owned farms in the North-east and other premises rented for pig production, Vion is currently reckoned to own between one quarter and one third of all pigs produced in Scotland.

While it may have been considered state of the art in its Hall’s of Broxburn days and while money has been spent modernising the lines, it was still described yesterday by the chairman of Quality Meat Scotland as being “slightly outdated”.

Last night, producers were more concerned about the latest surge in the price of soya and maize on the world’s futures markets than the possible closure of Broxburn.