Pig prices edge towards break-even

By Peter Crichton

UK pig prices have risen by 17p/kg since the start of the year, according to the latest Signet statistics.

With the UK AESA now standing at 85.15p/kg for the week ending 19 June, most breeder/feeders are closer to a break-even situation.

However, this has been assisted by a combination of lower feed prices and interest rates.

The true picture for many producers is still grim, with a mountain of debt to service and fragile demand during the summer months.

Meat traders report that pigmeat prices throughout the rest of the EU, apart from France, remain depressed as we enter the long holiday period. They report that the strength of the Pound and the weakness of the Euro continue to play havoc with the cross-border meat market.

Although Signet quotes a current cost of production figure for the six months to end-March 1999 of 85p/kg for a breeder/feeder selling bacon pigs, producers claim that bottom-line deductions are still robbing them of up to 10% of the quoted price.

After abattoir and haulage costs, as well as penal grading and weight drops, many producers have claimed that they are lucky to hit 90% of the quoted price.

Based on the current UK AESA this converts to a banked figure of only 76.5p/kg – equivalent to £53.55 for a 70kg deadweight carcass – which still throws up a loss of around £5.95 for each pig at the farm gate.

Most comparable EU quotes are based on a net producer price per kilogram. With lower deductions and much heavier carcass weight, they still seem to have the edge, according to UK producer groups.