22 May 1998

Price outlook poor in finisher market

FINISHED pig prices will remain poor at less than £1/kg for the rest of this year and during the early part of next year.

What happens to prices in the later part of next year will depend on the strength of sterling.

Speaking on the Pig Market – Opportunities in hard times -MLCs head of pigmeat strategy, Mick Sloyan, said price pressure had come from a combination of higher production in the UK, up 18% in the past two years, and in the rest of the EU. Added to this, strength of sterling had seen Continental prices falling even more sharply.

With little immediate prospect of sterling weakening, and production still expanding across the EU, it looked as if pig prices would remain under pressure for some time to come, predicted Mr Sloyan. But despite pressure on profits, there were plenty of opportunities for producers to exploit.

"A hard look at the Signet Pigplan data in the 1998 Pig Yearbook shows there is still a wide gap in profitability between average and top third producers." Research at MLCs Stotfold Pig Development Unit showed how efficiency improvements could be made.

"At the Unit an investment of £25,000 on heating and ventilation controls and changes in management have improved growth rates and cut the feed bill by £7.50 a pig or £45,000 a year," he explained.

There were also opportunities in the market for pigmeat and pigmeat products. Consumption was up 5% in the UK last year, compared with a 1% rise for poultrymeat, with particularly strong growth in the processed meats and catering sectors of the market. Overseas producers were impressed with UK pigmeat, too, he said, with one-sixth of the pigmeat produced in the UK exported.

MLCs Mick Sloyan… Prices will remain poor this year and into next year.