Pig prices fall on high numbers and steady demand

Steady demand has prompted a fall in pig slaughterings and a further price drop.

Rising pig numbers and relatively weak demand across Europe could mean further price falls over the coming weeks in the UK, warned AHDB Pork.

In the UK, a drop of 1.29p/kg took the EU-spec Standard Pigs Price (SPP) to 161.04p/kg in the week ended 23 September.

This is the largest weekly fall since February 2016 and takes the SPP back to its early June level, said AHDB Pork.

Contributing to the price pressure, many pigs had to stay on farm a week longer than expected because of slaughter plant breakdowns in the previous week.

The 20p/kg gap between current prices and year-earlier levels is the smallest since October 2016.

See also: Prospects for UK meat post Brexit

SPP prices are for pigs on which no premium (for example, Freedom Foods or special system) is paid other than for weights and grades.  

Slaughterings fell for the third week running, down 1% to 164,500 head, which is 9% lower than in the same week of 2016.

At 84.26kg, average carcass weights were 240g heavier than the previous week, 2% higher than a year ago and the heaviest since the end of February.

In the week ended 16 September, the EU-spec All Pigs Price (APP) also continued to fall, down by 0.55p/kg to 165.73p/kg, the lowest level since the end of June.

Weaner prices for the week ended 23 September saw 30kg pigs up by £1.73 a head on the week to £60.22 a head, more than £11 higher than year-earlier levels, while 7kg weaner prices fell £1.55 to £42.77 a head, £7.22 higher than the same week in 2016.

Pressure on EU prices

Despite the downward trend in UK pig prices, they have held better than in many other EU member states, partly because of the stronger pound over the past few weeks.

The UK price is 1.18p/kg above the average EU price of £1.62/kg deadweight.

EU prices usually level off over the summer holidays and then fall in autumn when production normally picks up of the year.

Across the EU average pig prices have been falling since early July and are only just above year-earlier levels, said AHDB.

The main reasons for this are high pig numbers, a possible drop in demand and EU exports falling by 31% in the second quarter of 2017, although this fell to 16% in July. The drop is accounted for mainly by a fall in exports to China.