The British pig sector suffered the worst financial situation on record during the first half of 2021 amid spiralling production costs.
New estimates released by the AHDB paint a picture of financials that may be difficult for British pig producers to sustain for long.
Estimated GB pig production costs in the second quarter of 2021 reached a record 182p per kg, according to the organisation's figures.
This was an increase of 8p per kg from the previous high of 174p per kg recorded in the first quarter of this year.
And compared to the same time last year, production costs were 27p per kg higher, the AHDB explains.
The increase primarily reflects rising feed costs, as elevated global cereal and oilseed prices feed into the cost of pig feed.
However, both labour and fixed costs had also increased compared to the first quarter of 2021.
Pig prices have also increased compared to the start of the year - the APP averaged 154p/kg in Q2, 9p/kg more than during the first quarter.
However, compared to last year, prices are 13p/kg lower. The AHDB explains that, on average, pig producers remain in a 'significant loss-making situation'.
Estimated net margins in Q2 2021 stand at -28p/kg, or -£24 per head, a similar situation to this year's first quarter.
Looking at the figures, AHDB senior analyst Bethan Wilkins said the first half of 2021 represented the worst financial situation across a six-month period on record.
"It is typical for pig production to go through cycles of profitability and loss-making, however, it is unusual for margins to be this low for a prolonged period," she said.
"The latest estimates paint a picture of finances that will be difficult for British pig producers to sustain for long."
Ms Wilkins added that it was 'not clear' that the situation would be better overall in the third quarter.
The EU-spec APP averages 165p/kg from the start of July to mid-August, which is higher than the Q2 average, but prices are now on a downward trend.
"Low EU prices and a more challenging Asian export market may mean this trend stays in place for the coming weeks," she explained.
"At the same time, it seems feed markets have remained strong. As such, the outlook for British pork producers remains difficult."
