16 January 1998

Low costs fail to boost pigs

PIG gross margins slumped during the six months to Sept 1997, despite lower costs compared with a year earlier.

Total returns for all four recorded systems of production were down by as much as 36%, according to latest data from Signet for the Meat and Livestock Commissions Pig Market Outlook.

Pig prices were unexpectedly high in early summer because of classical swine fever in Europe, but remained lower than during the BSE-boosted market of a year earlier. Moving into the autumn, levels fell away much more quickly.

Adjustments for the value of stock over the six-month period were exceptionally large. For breeder/feeder producers selling at 85kg or above, total returns were down by £28 a pig. Sales dropped by £18 a pig and stock purchases were lower by £4. The value of stock rose by only £2 a pig compared with £18 a pig in 1996.

As forecasts for the six months to March were being drawn up, MLC economist Tony Fowler said: "We are looking at a fairly depressed pigmeat market this year, with the highest production levels for over 10 years."