MLC to scrap price forecasting

5 November 1999

MLC to scrap price forecasting

By Peter Crichton

FOLLOWING a major blunder in its April 1999 forecast, the Meat and Livestock Commissioned has announced that it will stop publishing forward price predictions.

The decision was blamed on the fragile nature of the pig market and the associated difficulty of predicting forward trends.

The report in April had predicted UK pig prices to continue to recover, bringing many more producers into a break-even position within the next couple of months.

“They will improve most particularly in the second half of the year as a result of much reduced domestic supplies.

“By August the UK AESA (GB) could reach 100p/kg rising to average 115p/kg by December,” said the report.

Many producers are reported to have taken this report at face value and decided to hang on until the autumn to benefit from this recovery.

However, with prices at their current levels, breeders are racking up weekly losses of an estimated £3.24 million, or £42m for the autumn period.

UK slaughter numbers remain high, with the weekly average still close to 270,000.

Although this represents a drop on the exceptional peaks of 320,000 seen a year earlier, with imports rising the market is still faced with plenty of product.

Dutch weekly imports into the UK were up 8% for mid October at 2710 tonnes.

A comparison of January to May 1998/99 pigmeat imports from the EU into the UK also show several disturbing trends, with fresh and chilled boneless pigmeat up by 25%, and hams and shoulders by 29%.

Meat traders are quick to point out that, for UK pig prices to rise, not only does domestic supply have to decline further, but EU prices have to rise and their numbers fall.

Currently there is little market evidence that this the case and, with the Pound remaining strong, EU supplies will continue to penetrate the British market.

The UK AESA took another hit this week dropping a further 0.9p/kg to stand at 76.65p which, after deductions, represents a net banked figure of no more than 70p/kg or £50.40 for a 72kg deadweight pig.

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