By Peter Crichton
ALTHOUGH foot-and-mouth outbreaks are continuing and now total nearly 2000 cases, there are signs that restricted exports of pigmeat might soon restart.
The export market remains vital for the health of the whole of the UK industry.
Up to a third of annual pig meat output, estimated at 700,000t, was exported per annum before the foot-and-mouth outbreak.
The effects of the ban on exports were immediate, with tenderloins, which had been worth up to 6/pig, dropping by 50% and the price of shoulders also being cut in half.
Cull sows which had been traded at around 100/head have now fallen to a home market value of 25-35/head.
But there are now hopes within the NPA that some form of export activity might resume early this autumn.
This may be on a limited scale and trade sources believe that initially exports could be confined to whole carcasses only which are derived from and slaughtered in “clean” areas.
With a slight improvement in the value of the Euro, which is now worth just over 63p, the value of UK exports will be improved when they resume.
This also has the effect of slightly increasing the cost of imports, which remain a major challenge to the UK market.
Contract prices in the UK have continued to slip although the rate of decline appears to have slowed. The latest UK AESA is quoted at 98.07p/kg, down 1.25p on the previous week.
Spot quotes have seen a very narrow range between heavy and lightweights, with baconers traded at up to 1/kg and lighter weights worth no more than 4p-6p above this.
The “glut” of pigs from the Outgoers Scheme continues to disrupt the weaner market.
With weaner prices tumbling to less than 30/head in some regions breeders are now looking at negative returns for 30kg pigs.
The deadline for units to be cleared and premises decommissioned under the Mark 1 Outgoers Scheme is 31 August.
The scheme was taken up by 432 applicants and will lead to approximately 95,000 sow places being taken out of production.
Pig consultants are reporting that some successful applicants under the scheme have now decided not to proceed with decommissioning because they will be left in negative equity once the pigs have been cleared.
- Peter Crichton is a Suffolk-based pig farmer offering independent valuation and consultancy services to the UK pig industry
- Pig price trends
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