Farm gate to retail gap grows

THE GAP between farm gate and retail pig prices has widened over the past year, and strong supermarket control is likely to keep pressure on domestic pig prices.

According to the Meat and Livestock Commission shoppers now spend 33p out of every pound in the big supermarket chains. 

And 70% of all grocery purchases were spent in Britain‘s nine biggest supermarkets. 

The National Pig Association is also claiming that supermarkets are determined to hold down GB pig prices in the run up to Christmas.

The GB Deadweight Adjusted Pig Price published by the MLC on Oct 20 was 99.84p/kg compared with 105.34p twelve months earlier – a drop of over 5%.

But retail pork and bacon prices published by the MLC over the same period have risen and the farm gate to retail gap has widened.

Although EU pigmeat prices are an estimated 12% higher over the same period, the NPA is concerned that none of this increase appears to have filtered through to UK producers.

This trend is in contrast to the US where the breeding herd has dropped by just 1.6% over the past year and pork prices are at their highest level since 1997. 

As a result US producer returns have also increased in line with rising retail values.

The same upward trend is being seen in other EU countries as Russian demand for pork has risen. 

German and Belgium prices are now breaching the 100p/kg barrier and the EU mainland average pig price has made up some of its recent sharp falls to about 92.5p/kg.

With major supermarkets and caterers now using large tonnages of EU imports there are hopes that this European price rise will be reflected in the pre-Christmas UK pigmeat market.