Cheap imports drive biggest pig price fall for eight weeks

Pig prices have continued to decline as cheaper imports from the continent put pressure on the competitiveness of UK pork.

Low-cost pork from Denmark, Holland and Belgium has been appealing to British buyers in recent weeks, however the sign of German prices increasing last week offered a degree of optimism for UK producers.

The EU-spec SPP fell by 0.55p to 149.26p/kg – its largest weekly price drop since the start of June – in the week ending 11 Aaugust – 15.27p/kg below year-earlier levels, according to AHDB Pork.

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APP price saw a more shallow decline in the week ending 4 August, dropping by 0.25p to 152.70p/kg.

This widened the gap between SPP and APP to 2.89p/kg and produced the unusual situation where APP sample carcass weights were above the SPP at 82.27kg.

Average costs of production had increased by about 10% from the start of the year, according to pig market consultant Peter Crichton, as the drought sent feed prices sky high.

“We’ve gone from between 135-140p/kg at the start of the year for Red Tractor-assured pigs to about the 148p/kg mark now.”

Mr Crichton added that this would likely continue to move upwards as the rising prices of grain and soya showed no signs of abating.

Cooler weather across the UK has improved growth rates, however the figure remains 700g below year-earlier levels, says AHDB Pork.

Slaughterings dropped 4% on the week at 168,800 head, but remained in line with year-on-year levels.

Sluggish demand in the week ending 11 August pushed weaner prices down as higher feed prices loomed in the mind of many producers.

Weaners in the 30kg category saw a week-on-week decline of £3.28 to £52.79 a head, while 7kg weaner prices dropped by £1.98 to £37.41 a head over the same period.

Disappointing exports

There were falls for both pork export volumes and values from the latest HMRC data.

Volumes fell by 7% to 16,700t compared with June 2017, while value dropped by 9% to £22.6m.

Restrained demand from China and Hong Kong were key drivers behind the falls, importing 19% (630t) and 58% (550t) less UK pork than a year earlier.

Pork exports to Denmark and the Netherlands were considerably lower than in 2017 according to AHDB Pork, dropping by a combined 1,140t.

There were more positive signs for exports, with trade increasing with the USA, Germany and Ireland by 36% (+208t), 10% (+3,100t) and 9% (+3,300t) respectively.

Trade with Poland and Japan also increased, in albeit smaller markets.

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