Pig-market commentary – 22 December

Friday 22 December, 2000

By Peter Crichton

UK pig prices look good – but are they?

THE UK is top of the price chart among Europes “Big Six” pig-producing countries.

According to Signet figures released in the week ending 22 December, UK finished pig prices for November – at 102.2p/kg dw – were 10p/kg above those in Germany.

Germany came in at 92.2p/kg, with France at 91.2p, Spain at 82.4p, Denmark 82.3p and the Netherlands 79.7p.

But these statistics are based on different average carcass weights – 71kg for the UK, with other countries at between 77.8kg and 92.7kg.

The UKs producers also suffer from much greater bottom-line deductions, at close to 2/pig, with more modest levels in other EU countries, where governments absorb most meat-inspection and other food-safety costs.

Trade sources, however, reckon that these figures promise a better future for the Uk pig industry in 2001.

The same pattern of rising prices is seen in Europe, and the influential Dutch AEX futures market is firm for the next six months.

All quotes are in the 89-92p bracket and, although physical volumes have remained high, demand has also been good – partly because of the continuing BSE scares in many EU countries.

This EU-wide view is backed up by the GB AESA for week ending 22 December – virtually unchanged at 104.51p/kg, at a time of year when demand usually slips over the two “short” weeks of Christmas and New Year.

Spot prices remained very firm, too, right up to the holiday period.

The live market trade averaged 83p/kg in the week before Christmas, equivalent to 110p/kg dw.

Store pig prices have also been bullish, and the FARMERS WEEKLY 30kg weaner average ex-farm price for last week rose to 37.70/head, compared with 18.25 a year before.

Pig decline could prompt Malton sale

UK PIG numbers continue to decline, with recent statistics pointing to a year-end weekly kill of not much more than 220,000 head, and the prospect of further reductions in 2001.

Meat traders forecast more abattoir closures and mergers as a result.

We have already seen Dalehead Foods taking over BQP to ensure an adequate supply of pigs in the future.

At the same time, the Malton Bacon factory has warned suppliers it may cut its total kill to 15,000-20,000 head – one-third of the factorys capacity two years ago.

This could signal the sale of the Malton pig business to a third party and growth in processing imported pigmeat. Dutch imports were set at 3233 tonnes in the week ending 15 December – equivalent to 45,000 pigs.

To add to the problems of the slaughtering industry, MAFF reports a significant response to its “Out-goers” pig-industry restructuring scheme, announced on 04 December.

Pig breeders ready to quit the industry for at least 10 years are offered a one-off payment from 26 million-worth of EU funds during 2001.

Over 300 requests for application forms have been received by MAFF, which could result in the target reduction of 16% in capacity of the UK sow herd (as at June 1998) being met.

Producers are being advised to consider bad debt insurance against the possibility of more vulnerable abattoirs – those without long-term supermarket or nuche outlets – collapsing.

• Peter Crichton is a Suffolk-based pig farmer offering independent valuation and consultancy services to the UK pig industry