MLC revises pig price forecasts
By Robert Harris
THE Meat and Livestock Commission has reduced its forecast pig prices through to March next year by 4-8%, following the decision by many abattoirs to keep sourcing contract pigs using price formulae.
The commission had expected more abattoirs to switch to fixed values, following the lead taken by several companies in June. Instead, most remain linked to MLCs adjusted Euro-spec average.
“But there is now much greater use of other elements, such as spot or auction market price averages,” says the commission.
Unfortunately, these have continued to fall, dragging down the abattoir price.
Spot prices slumped to 55-60p/kg dw this week. Higher UK slaughterings are partly to blame – clean pig slaughterings were up 5% in the first six months of the year to 7.7 million head, and 15.6m are expected to be killed by the end of the year, up from 15.1m last year.
Collapsing Continental values, together with the high Pound, have compounded the effect, leading to cheap imports and low-priced exports. “The result has been a less static average price than expected.”
As a result, the new MLC forecast is for a UK adjusted spec average price of 85-87p/kg dw for the six months ending in September (down 4p/kg on original forecast), and 86-92p from then until March 1999 (a drop of 6-8p/kg). Prices for the six month period to March 1998 averaged 95.6p.