31 July 1998

Steep price cuts hit Continental pig producers hard

By Philip Clarke

CONTINENTAL pig producers have seen prices collapse by similar amounts to the UK, and in some cases by considerably more.

The steepest falls have been in the Netherlands. Grade E pigs there were recently making just 2.27 guilders/kg (68p/kg) dw, a drop of 37% on last year.

April census figures show pig numbers are now recovering, after the lifting of a breeding ban in Nov 1997, imposed in the wake of last years classical swine fever outbreaks. Suckling pigs are now at 92% of pre-CSF levels, compared with 71% at the start of the year.

Meanwhile, plans to take out 10% of Dutch output this year, as agreed in the spring, have been delayed after a change of government.

Combined with a drop in domestic consumption, the squeeze of margins is likely to continue, says Frans Bruins of the Livestock Product Board.

Denmark has a similar tale of woe, with Grade E carcasses back 31% to 7.92kr/kg (71p/kg) dw, the lowest prices since the mid-1970s. In common with the rest of the EU, supply pressure is the key. Herd expansion was rapid after last years June price peak, says Danske Slagterier product manager Per Sorensen.

He believes values could improve slightly in the second half of 1998, as some producers leave the industry and export prospects improve. "The Japanese market has been slow this year due to economic recession and large stocks of imported meat. But things are now starting to happen and we could ship a more normal 130,000 to 140,000t."

But the real growth market is Russia which rose 40% last year to 116,000t and is expected to take more this year. Denmark has also lifted its exports of live pigs to Germany, filling in for traditional Dutch suppliers. But the UK market is stagnating, says Mr Sorensen, who sees little prospect of improving on last years shipments of 236,000t.

French and Irish producers are also feeling the pain, with 30% and 18% price falls, respectively, in the past 12 months.

Total pig numbers in France in the year to May rose 3%, while the breeding herd was 1.8% up. The number of maiden gilts is a huge 9% higher. Ireland, meanwhile, reports a 4.4% rise in the breeding herd. &#42