Pig producers’ share of retail price increases
Pig producers saw a bigger share of the retail price for their produce last month after the Deadweight Average Pig Price rose but retail prices held.
The average EU-spec DAPP in November settled at just over 160p/kg – nearly 3p higher month on month.
The average retail price collected by AHDB Market Intelligence stayed the same as October.
This meant the margin between the price paid to the producer and the retail price was slightly lower at 57.8%, with producers receiving 42% of the retail price. This is up from 40% a year earlier and the highest share since July 2009, said BPEX.
Retailers had been under pressure to keep prices low, said analyst Stephen Howarth from BPEX. However, from the second half of November retail prices began to edge up.
It was processors who were the most likely to be squeezed by these small margins, he said, but they have had some success in negotiating with retailers.
“This is probably the start of more sustained price increases,” he said.
Consumer demand is typically lower at the beginning of the year due to people feeling the pinch post-Christmas, he said. In addition, supermarkets will have a lot of leftover stock, so there is likely to be a drop in DAPP prices post-Christmas.
However, the market will recover from February onwards because of reduced production in 2013, he forecasted.
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