Reports of sharply rising EU pigmeat values have boosted UK producers’ hopes of better domestic pigmeat prices to help offset sharply rising feed costs.
Average EU mainland producer prices rose by 20% from 92.5p/kg in mid February to 111.3p by mid March.
Over the same period, the value of the Euro rose from 74.0p to 78.5p, effectively putting up the cost of imported pigmeat and lifting the value of UK pigmeat exports.
Although the latest GB Euro Deadweight Adjusted Pig Price continues to improve and is now quoted at 112.89p, UK spot bacon prices have surged ahead with quotes in the 115 – 117p/kg region available.
Pigmeat traders are expecting prices to continue to improve post-Easter at a time when food inflation is starting to hit most sectors of the retail market.
But according to the latest Meat and Livestock Commission forecast, UK producers will need deadweight prices to hit the 140p/kg mark before profitability returns to the industry.
Cull sow values have also moved up due to the stronger Euro and better EU pigmeat prices, with export abattoirs now quoting 85-90p/kg compared with 65p/kg a year ago.
This put up the value of the average cull sow from £95/head to £125/head and may encourage some producers to consider restocking with breeding gilts rather than leave the industry for good.
Further turmoil in the US financial market may also continue to strengthen the value of the Euro and further improve the UK pigmeat import/export supply balance.