28 July 1995

Forecast bright for pig prices

LOWER marketings will keep pig prices above 1994 levels for the rest of the year, according to the Meat and Livestock Commissions Quarterly Market Outlook.

By the week ending June 24, the adjusted UK spec average price was 120.87p/kg (12p/kg up on the AAPP of 12 months earlier). And although some seasonal summer weakening may occur, the AAPP in December could be 16p/kg above 12 months earlier.

The outlook follows a buoyant period when lower numbers and a strong export demand – fuelled by exchange rate movements – supported the market.

In mid-June UK values were the highest among major producing countries and 4% above the EU average.

This is reflected in producers gross margins, which, in the six months to March 1995, were well up on year-earlier figures. And a further improvement for all systems is forecast for the six months to September 1995.

But higher feed costs, resulting from tight cereal supplies, could offset any further gain in returns in the following half year, says the report.

Production overall is predicted to be 3% down on 1994 to total 14.25m head. A cautious approach to herd expansion could, however, result in a small increase in slaughterings from the second quarter of next year.

Generally, the MLC cites producers continuing "reluctance" to restock herds, despite improvements in prices. Stall and tether legislation may be contributing to this, it suggests.

But fewer producers have left the industry than was expected in the recent past, it states, with those remaining "resilient and committed" to the sector. &#42