Worldwide pig meat prices have continued to fall, with EU mainland pigmeat producer quotes slipping from €1.50 to €1.25 over the past three months.
US pigmeat prices are at their lowest levels since April 2006, with southern hemisphere pig producers in South America and Australia also facing falling returns.
While the European Union has introduced Aid to Private Storage for 100,000 tonnes of pigmeat this week (29 October), this may do little more than stabilise the market rather than improve values.
Improve retailer prices
In order to ease the financial pressures faced by UK pig producers, the British Pig Executive is considering an industry proposal to suspend the pig levy worth £1.05/pig for a three month period.
At the same time, BEPX is investing £500,000 in a promotion campaign to try and improve retailer prices and to ensure that this rise is passed down through the supply chain to the producer.
A widening gap has also opened up on the UK pigmeat market between spot and contract quotes.
The latest GB Euro DAPP which includes cost of production related contracts has increased to 109.29p, whereas spot quotes have slipped to between 100 – 102p/kg as this sector of the market continues to be challenged by cheap imports.
Weaner quotes are also following a similar two tier pattern.
Weaners sold on contracts tied to the DAPP are still being traded in the £32 – £36/head range, but sellers on the spot market were finding the going much harder and having to settle for prices of between £4 – £6/head below contract levels.
Until the feed price and pigmeat value balance is restored, worldwide pig numbers are expected to decline leading to an ultimate shortage for those with the financial resources to stay in business until then.