Brussels shore-up fails as pigs dip further still
By Philip Clarke
PIG prices have slipped again this week, despite moves by market managers in Brussels to boost subsidies for sales outside the EU.
In the face of concerted lobbying, the commission increased export refunds for most bone-in cuts by 50% from Monday (Aug 3), and extended the aid – worth up to 20.3p/kg – to boneless cuts.
Producer bodies in the UK welcomed the decision. "It is vital assistance to an industry on its knees," said NFU president, Ben Gill.
But so far the measure has had zero effect on domestic prices. At MLC sample markets at the start of the week live pig values dropped another 1p to just 49p/kg.
British Pig Association chief executive Grenville Welsh warned against expecting too much too soon in the face of gross oversupply throughout Europe, and particular problems in the UK from the strength of sterling. UK processors also had made only limited use of export refunds in the past, he added.
The best chance of any recovery in prices, therefore, lies with continental pigmeat traders, who can make more use of the extra subsidies. Denmark, for example, exports almost 80% of its pigmeat, compared with less than 20% by the UK. (See table)
"We operate in an EU market," said Meat and Livestock Commission pigmeat strategist, Mick Sloyan. "It does not really matter if it is the Danes, the Dutch or us who do the exporting. It is the effect on EU prices that matters."
To this end he is encouraged by the rise in refunds, and especially the reintroduction of aids for de-boned pigmeat, which has been the most depressed sector in recent weeks. The fact there is no time limit or volume restriction is another positive, he says.
But this has to be tempered by the fact the refunds do not apply to frozen boneless loins – the product most often shipped to the normally lucrative Japanese market.
Some UK processors have also expressed regret that more money was not put towards the bone-in side of the trade. "We have a particular bone disposal problem in the UK, since we are not allowed to produce meat and bonemeal. We could do with more help in this area," said one trader.
Importance of pigmeat exports to UK and Denmark
Production 1.6m tonnes
Exports 1.2m tonnes
% to Third countries 45%
Production 1.2m tonnes
% to Third countries 10%