Two steps forwards, one step back for pigs
By Peter Crichton
FORWARD feed prices, slaughter numbers and the fall-out from the Belgian dioxin scandal affect the outlook for UK pig producers in the months ahead.
Reports from the USA indicate that corn and soyabean harvests will be good, and will put extra tonnage onto an already depressed feed market.
More US growers have shifted into soyabean production and, given favourable weather in the next eight weeks, a record crop of almost three billion bushels is forecast, which will be added to a large 1998/1999 carryover.
At the same time, US pig prices are starting to climb from a give-away 30¢/Ib (42p/kg) in December and January, to 50/60¢ now.
At the same time, the weekly kill has declined from almost 2 million to 1.6m, a weekly drop equivalent to more than the entire UK output.
UK weekly slaughter numbers continue to slide and in mid-June stood at 260,000, compared with 302,000 a year ago.
This tightness in numbers has helped keep UK prices steady in what is normally a difficult trading period.
Many abattoirs are now trying to source adequate forward supplies for the autumn, with better contract terms on the table.
The current level trend in domestic prices is illustrated by the latest UK AESA for the week ending 10 June, remaining virtually unchanged at 85.7p/kg liveweight – still 4p below last years figure and 10p below average production costs.
A major UK pig buyer has predicted that prices in the UK will be in “three figures” in the autumn although, as one hard-pressed producer quickly pointed out, 72.5p is also three figures.
Sow slaughterings are also well below last years peaks and the June census figures, when available, are expected to confirm the downward trend in numbers on the ground.
The sting in the tail has been a downward correction in some EU prices in the aftermath of the dioxin crisis in Belgium.
It is now seven weeks since standstill orders were placed on pig movements from many pig farms in the Low Countries.
As the source of the contaminated feed has now been identified and tracked, slaughterings are resuming and there is a huge backlog of heavy pigs to be mopped up.
Because of the reluctance of many Belgium consumers to buy the home-produced product, containerloads of low-priced manufacturing-grade pigmeat are scouring the highways of Europe searching for homes.
Even a comparatively small overall offering in tonnage terms compared with the total EU demand can undermine the market, especially in the run-up to the holiday period, when prices tend to slip.
This is why British Pig Industry Support Group members are continuing to press UK retailers and caterers to buy only the locally-reared product in an attempt to insulate the home market, to some extent, from EU and worldwide prices.