1 September 2000

Swine fever zone restrictions put pig prices at stand on

By Tamarind Davidson

CONTRACT pig prices remain at "stand on" levels as producers, caught up in swine fever surveillance zones, await news on whether they will receive compensation for slaughtering pigs under the welfare disposal scheme, which started today (Aug 30).

Although pigs in these zones are healthy, they cannot be marketed under MAFF restrictions put in place to control the spread of disease.

"Prices could go either way," says independent consultant Peter Crichton. "If compensation is paid for slaughter, this will reduce the number of pigs on the market and prices will rise. But if no payment is awarded then farmers simply cant afford to kill their animals.

"Unless some form of orderly marketing scheme is put into operation soon, pig producers will be severely affected. There are 50,000-60,000 pigs locked up in surveillance zones. When they flood the market in mid-September the price of bacon will drop significantly." This weeks adjusted eurospec average (AESA) is 102.18p/kg and has shown little change over the past two weeks. And any price rise caused by the swine fever outbreak is unlikely to be seen for a week or two. "I do not see the AESA rising much more than about 0.5p/kg."

Spot and live auction prices, which make up about 5% and 15-20% of the finished pig market, respectively, have firmed. "The shortage of pigs in East Anglia has led to a slight local increase in spot prices, but they will remain firm in the rest of the country," says Mr. Crichton.

Quotes for cutter/baconer pigs are in the 107-114p/kg range and the live markets are trading between 78-85p/kg liveweight. Finished pig prices typically slip during the summer holiday period and the weekly kill is also forecast to fall further to about the 225,000 level.

Most processors still report no problem with supplies, but it all depends on the decision on whether to award compensation for producers to slaughter their pigs, says a spokesman for Malton Foods.