By Peter Crichton
ITS been another confusing week for pig producers. The All-Average Pig Price climbed 3p, but spot prices fell by twice as much in the opposite direction.
Most traders say the low price for sheep and poultry is dragging pigmeat returns down. The UK-Specification price for the week ended 18 February was 93.26p, in spite of a 10.5% jump in year-on-year pork consumption for the final quarter of 1997.
The surge in demand has been more than met by increased slaughterings, according to the latest Meat and Livestock Commission figures. About 15.3 million head were slaughtered during the 12 months ended January 1998, compared with only 13.9m a year earlier.
Spot prices slipped back sharply last Friday. A downward trend is expected to emerge again at the end of this week, when trading prices for next weeks supplies are quoted and the 85p baconer will become a reality once more.
With the exception of France and Spain, EU reference prices in the main pig producing countries all fell during January. The Danes suffered the biggest drop and an 87.5kg Danish carcass is worth only 75.4p/kg.
As imported Danish pigmeat supplies become even cheaper, Sterlings strength continues to present an uphill challenge for UK producers to compete with their biggest rival.
If the current financial storm sweeping the UK pig sector lasts much longer, its hard to see how farmers can survive in what is already a highly efficient industry.
Many producers are considering a change from indoor production to an outdoor system on the basis that outdoor units can be cheaper to run. But those farmers should also be aware that outdoor units have a high price to pay in feed costs.
The latest production figures published by Signet indicate a feed cost per outdoor sow at an annual £204, compared with £175 on an indoor unit. This alone can add a further £14,500 to the 12-month feed bill on a 500-sow herd.