By Peter Crichton
PIG producers in the UK face a dilemma: Prices are too high to make exports competitive, but too low for farmers to make a profit.
According to the latest data released by Signet for March, prices on the home market exceed all those for the major EU pig producing countries. Coupled with the strength of the Pound, this continues to limit export opportunities for home producers, and sucks in cheap imports.
With the exception of Denmark, all major EU producers have seen prices slip. Some countries, such as the Netherlands, saw prices fall by 7.2% last month.
Although EU pig carcasses are heavier than their UK counterparts, the price data nevertheless make bleak reading for UK producers. Indeed, some UK farmers accuse foreign producers of flouting animal welfare considerations in an effort produce as cheaply as possible and undercut UK pigmeat prices.
Domestic pig prices in the Easter period took a dive on the spot market because of the two “short” weeks and the decision of a major abattoir to reduce throughput by 20%. This has resulted in more pigs on an already oversupplied market.
Spot quotes for baconers last week fell to 78-84p/kg. The latest Adjusted UK Spec price is expected to show a decline of 2-3 p/kg deadweight, compared with 97.35p at the beginning of this month.
A partial recovery in spot quotes this week is estimated to improve prices slightly, following rises in the auction market but no big jumps are on the cards.
Cull sow prices continue to reflect the weakness of the European market with current quotes as low as 55p/kg deadweight. Export-dressed carcasses value the average sow at around £80.
Weaner returns had until recently been hardening, but they also face a downturn. Spot quotes now under £30 per head, compared with production costs estimated at £32-£34 per head for indoor and outdoor systems.
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- Peter Crichton is a Suffolk-based pig farmer offering independent valuation and consultancy services to the UK pig industry