By Peter Crichton
THE gap between producer and retail pigmeat prices is at its widest for four years, it was claimed this week.
Decembers Average All Pig Price of 91.6p/kg was 340% below the average retail price of 311.2p/kg, according to a recent study by the NFU and Signet consultants.
The Meat and Livestock Commission claims last autumns pork-mince campaign was successful. But more promotion is needed to stimulate demand for UK pigmeat and ease over-supply in an already weak market.
The second phase of the MLC campaign, which began this week, will run until mid-February. Advertisements for pork-mince will be shown on all major television channels; recipe booklets will be given to shoppers in supermarkets and independent butchers.
Statistics for 1997 show a 10.3% rise in slaughterings, with a total kill of 15.2 million pigs. Although year-on-year sow slaughterings were up 34% in the last four weeks of December, it can take up to 36 weeks for all their progeny pigs to flow through the system.
Current sow prices are now as low as 62p/kg deadweight, valuing the average sow at little more than £80. Many producers with large borrowings are in the same “negative equity” trap faced by many homeowners a few years ago.
Deadweight prices have rallied slightly. Spot quotes for bacon pigs last week rose to 85p/kg. But the AAPP continues its relentless decline – only 88.7p/kg for pigs meeting UK specifications in the week ended 10 January.
The high number of pigs on the market is likely to mean spot prices will fall a few pence by the end of this week. Abattoir operators are faced with plentiful supplies, boosted by a growth surge during the recent mild weather and the strong Pound.
One bright spot is news of recent export enquiries for weaners to the Low Countries. Anything that relieves the numbers on the domestic market will be welcomed by most producers, provided strict disease control procedures prevent livestock vehicles returning infected to these shores.
In the longer term, the stall-and-tether ban is only 11 months away. Many older indoor producers could leave the industry for good, rather than trying to raise enough money to comply with the new requirements.
The number of pigs on the home market towards the end of this year could thus be reduced – but only if the rush into outdoor pig production slows down.