By Farmers Weekly staff
FEARS of a glut of cheap imports undermining UK pig prices were raised this week after industry figures suggested a steep climb in sow numbers on the Continent.
But the figures, reported by Signet, are not quite what they seem, says the Meat & Livestock Commission – they were recorded using data from last December.
“There will be a reduction [in sow numbers] on the Continent towards the end of the year, but not the drop seen in this country,” says MLCs Mick Sloyan.
Domestic markets could still be affected, as they command a premium of up to 28p/kg over some EU supplies; a gap that may increase if Sterling strengthens. “While UK prices have stalled in the mid-80s, we still hope they will reach 90p/kg by mid-1999. But its a case of wait and see.”
Slightly higher prices recorded recently on the Continent could help, he adds. “But there is still a substantial margin between UK prices and the rest of the EU; if this persists it will put a lot of pressure on the market.”
Max Hilliard, managing director of Malton Foods, the UKs biggest pig processor, says the company will continue to source home produced pigs as long as supplies are readily available. But prices will have to remain competitive.
His comments follow this weeks renewed warning on trading conditions by parent company Unigate. Pressure on pig margins is partly to blame – the Malton business accounts for about 20% of group profit.
“If there is no profit in slaughtering a British pig compared with an imported alternative, it is inevitable that imports will get sucked into the vacuum created. So the price returned to UK producers is held down by the price people can import at. We are certainly not turning pigs away,” he says.
However, home supplies are dwindling since tighter legislation has forced British pig producers out of business ahead of European competitors, he adds.
If Malton throughput follows suit, then the factory will have to look elsewhere. “As numbers tighten, imports are inevitably going to grow,” says Mr Hilliard.