22 December 2000

Pigs better but imports thrive

THIS years pig prices have improved on last years close by nearly 30p/kg on the Euro spec average, but a shortfall in production means imports have flooded in.

Independent consultant Peter Crichton says the equivalent of 40,000 pigs is currently being imported from Holland. And Danish exports are up too, with supplies of pork cuts, legs and joints up by 16,000t to 172,000t in the first six months of this year.

The increase is due to a big drop in the UK weekly kill, which is down by 80,000 pigs a week, from 300,000 in 1998 to just 220,000 now.

This means domestic supplies will contribute even less to UK retail demand. But UK price rises have been limited because the strong £ means that, despite recent price rises on the Continent, imports are relatively cheap.

Danish producers, for example, have seen prices rise from 8kr/kg (70p/kg) at the start of this year to 10.30kr/kg (85p/kg) in the last quarter and Continental values look reasonably secure.

Danish prices will remain strong certainly for the first half of next year, says John Howard marketing director of Danish Bacon and Meat Council.

"Theres certainly been a short-term benefit from BSE. But input costs, particularly feed, will probably increase as well," he says.

The meat and bonemeal ban will increase vegetable protein prices throughout the EU. "This could take the gilt off the gingerbread."

If the £ strengthens, the pig meat market on the Continent continues to improve and EU costs of production rise, UK pig prices could benefit, according to industry pundits.

But the general feeling is that tightening world supplies in the second half of next year will limit rises to a modest level.