Pig farmers hope for price rises in spring

Pig prices face a tough start to 2015, with supplies still running high and shopper demand sluggish.

The standard pig price (SPP) dropped 0.74p/kg to 141.7p/kg in the week to 10 January, compared with a UK average of 169p/kg a year ago.

Slaughterings are building back to pre-Christmas levels and the pigmeat supply is still high, with carcass weights heavier on the year and abattoir throughputs still up 10%.

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The price pressure is worse in Europe, where pig producers have been more directly affected by Russia’s ban on EU pork imports a year ago.

Bpex’s EU reference price fell again to 104.05p/kg in the week to 3 January, down more than 30p/kg on the year.

AHDB/Bpex market specialist manager Stephen Howarth said the underlying problem was weak consumer demand, with retail pork sales falling 4% on the year in the 12 weeks to December. That was despite average retail prices dropping 6% over the period.

“Demand is what has got to change,” Mr Howarth said. “Supply is likely to be reasonably plentiful in the next three to six months.

“It is going to be quite a tough year. The European price is weighing on our prices and some imports are coming in cheaper.”

A bright spot is that falling prices do not seem to be pulling in cheap, foreign meat.

UK pigmeat imports totalled 31,400t in November, down 5% on the year.

“It is going to be quite a tough year. The European price is weighing on our prices and some imports are coming in cheaper.” Stephen Howarth, AHDB/Bpex

But the import pressure has grown since then, as the pound continues to strength against the euro, making European pork less expensive to buy.

National Pig Association chairman Richard Longthorp said it showed retailers were sticking to promises made after the January 2013 horsegate scandal and stocking more home-produced, farm-assured pork.

He particularly praised supermarkets stocking 100% British pork, Waitrose, Marks & Spencer, Budgens, the Co-op, Sainsbury’s, Morrisons, Aldi and Lidl.

“Europe is full of cheap pork and if [retailers] so wanted they could go get some cheaper stuff,” Mr Longthorp said.

He added that low prices were a huge concern but farmers could ride out the slump as long as feed prices stay low and the UK stays free of African swine fever and porcine epidemic diarrhoea virus.

“If we get any of those diseases not only would we lose the pigs, we would also lose our export markets,” Mr Longthorp said.

Consultant Peter Crichton said the two glimmers of hope were strong productivity across the sector and low feed prices.

Feed wheat was worth £121-128/t ex-farm in the middle of last week, which was causing feed values to ease.

Mr Crichton said some farmers were buying feed at spot prices month to month in anticipation of values coming back further.

He said some finishers were gambling on prices recovering in the spring by taking advantage of the way weaner values have fallen.

Last week 30kg weaners averaged £47.85 a head – £9 less than a year ago.

“The normal trend for seasonal prices from past years has been that from March onwards pigmeat prices normally improve,” he said.

“Cashflow is becoming a challenge but we have had a reasonable run over the past 18 months or so.”