EU pig prices cap UK recovery

By Peter Crichton

HOPES of further improvement in UK pig prices have been dashed by recent meat trade forecasts that producer prices will continue to be affected by high numbers and low returns throughout Europe.

At a recent Malton “meet the farmers” meeting, anxious producers were warned that the home market may still trade at a loss in the months ahead.

Although there has been a better retail uptake of the UK product as far as some of the prime cuts are concerned, there is still little home demand for the hands, bellies and other manufacturing products.

Bargain basement

In the past, there was a ready market in the EU for these cheaper cuts. Now that prices have slumped for manufacturing pigmeat throughout Europe, UK abattoirs are struggling to find new outlets except at bargain-basement prices.

The situation is not helped by the strength of the Pound, which not only helps a price challenge to exporters, but also lets cheap imports penetrate the domestic market.

At the same time, according to the latest figures published by Signet, the MLC consultancy arm, UK prices are still notching up losses of about £10 per pig. However, they are also the highest in Europe.

Production costs

To rub salt into the wound, production costs throughout the five main EU pig producing countries are all lower than in the UK.

This is partly due to more intensive systems, which are less welfare-friendly; cheaper feed, including meat and bonemeal; and the better market in Europe for much heavier carcass weights.

Holland and France for example have average carcass weights of between 87.1kg and 87.5kg compared with just 70kg in the UK.

This allows their producers to add the extra weight with cheaper feed costs of under 30p/kg of liveweight gained, and to spread their fixed costs over a longer time span.

Low cull-sow prices also provide a ready indicator to UK producers of current pigmeat values in the EU, as almost all domestic cull sows end up on the European market, which is awash with manufacturing-grade pigmeat.

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