Europe sneezes and the UK catches the cold

Since August, pig prices have been falling steadily, with an accelerated decline of around 1.2p/kg per week since the start of the year. In practical terms, that’s nearly £14 wiped off the value of a finished pig in just three months. The sector now sits at breakeven, according to AHDB - an uncomfortable position given the fragility exposed during the 2021/22 crisis, when roughly 15 per cent of independent producers exited the industry.

The immediate cause is clear enough: a collapse in EU pork prices, driven in part by African Swine Fever (ASF) in Spain. But focusing solely on that trigger risks missing the deeper issue. The UK market has become highly exposed to external shocks, while domestic policy choices have amplified - rather than mitigated - the impact.

The UK Government’s continued openness to imported pork, combined with limited border controls and the rapid acceptance of regionalised trade from ASF-affected areas, reflects a system calibrated primarily around price. That may help suppress food inflation in the short term, but it raises uncomfortable questions about risk tolerance - particularly when dealing with a disease that carries 100 per cent mortality in pigs.

This is where policy and market dynamics begin to collide. On one hand, there is a stated ambition to support domestic agriculture and improve resilience. On the other, there is a clear prioritisation of cheap food, reinforced by retail competition and consumer price sensitivity. The result is a contradiction at the heart of the system.

Retailers and food service operators are making decisions that reflect the pressures of the current system, including tight margins and price-conscious consumers. Cheaper European pork therefore becomes hard to overlook. Yet, although these choices may be understandable in context, they are contributing to a less resilient system overall and are putting the viability of domestic production at risk.

At the same time, the structure of the UK pork industry has been shifting in ways that reduce resilience. More than half of production is now controlled by processor-owned supply chains, with a significant proportion of those businesses under foreign ownership. This is not inherently problematic - global investment is a feature of modern economies - but it does change incentives and the value placed on domestic primary producers.

Large, integrated processors are better placed to respond to short-term market signals, including switching between domestic and imported supply. Independent producers, by contrast, are far less flexible. Reports that some processors have recently issued notice to family-run farms suggest that this imbalance is beginning to play out in real time.

The long-term implication is a gradual hollowing out of the independent sector. That matters not just from a rural economy perspective, but from a food security standpoint. The UK is already only around 50 per cent self-sufficient in pork. Further consolidation and contraction would increase reliance on imports, leaving the system more - not less - exposed to the very global shocks currently driving volatility.

Consumer behaviour adds another layer of complexity. There is clear evidence that shoppers value local produce - 66 per cent say they are more likely to buy pork if it is Scottish. Yet this preference is not consistently translating into purchasing decisions, largely because the information needed to act on it is obscured.

Country-of-origin labelling remains inconsistent and, in some cases, misleading. Products processed in the UK using imported pork can still be presented as “British” or alternatively masquerading under “mixed-origin” labels in ways that are technically compliant but practically opaque.

NFU Scotland’s ShelfWatch audit found that 14 per cent of pork products fall into this grey area. In the out-of-home sector, transparency is even more limited.

This lack of clarity weakens the market signal that consumers might otherwise send.

In effect, it allows price to dominate over provenance - not necessarily because consumers prefer it, but because the system is designed that way.

Taken together, these factors point to a deeper misalignment between policy objectives, market incentives and consumer intent.

If the goal is a resilient, sustainable domestic food system, then current trajectories are problematic. A continued emphasis on the lowest-cost supply, combined with exposure to volatile international markets and a lack of transparency for consumers, risks undermining the very production base the UK relies on.

Addressing this does not require abandoning affordability, but it does require recalibration.

More robust border controls would reduce biosecurity risks. Clearer and more consistent labelling would allow consumers to make informed choices. Trade policy could place greater emphasis on equivalence of standards, rather than simply price.

And supply chain reforms - such as Fair Dealing Obligations - need to be part of a broader framework that supports, rather than squeezes, domestic producers.

Without that shift, the current situation is unlikely to be a temporary dip. It is more likely a signal of where the system is heading.

And in that context, the question is not just why prices are falling - but what kind of food system the UK is choosing to build.

Jamie Wyllie, is Chair of NFU Scotland’s Pigs Committee