15 January 1999

Pig prices still under pressure

PIG prices are expected to remain under pressure for some time to come, with latest figures from the Continent suggesting plentiful supplies in the year ahead will overhang UK markets.

A livestock census taken last November in Germany, the EUs biggest pigmeat producer, shows pig numbers totalled 26.3m, the countrys highest ever level. However, a drop in weaner numbers (3% lower in November compared with April) and in-pig gilt numbers (down 2% over the same period) suggests the pig herd is now contracting, says the Meat and Livestock Commission.

This will take time. Only in the final quarter will production fall below year earlier levels (-3%), leaving 1999 output exceeding 1998 by 2%.

The figures have disappointed the industry. Germany, with its less efficient cost structure, was expected to be the first of the major Continental producers to show a downturn.

At home, the year on year decline in the weekly kill continues, though the mid-December fall was only about 3%. Throughput remains well above 300,000 head a week. Some experts reckon production costs will not reach break-even levels until the third quarter of the year.

&#8226 US pig producers are to receive up to $2500 (£1500) each in emergency aid, to help them weather the current economic crisis. The $50m (£30m) package will be targeted at almost 100,000 "small" producers, who sold less than 1000 pigs in the past six months, paying up to $5 (£3) a pig on the first 500 animals. &#42