Pig prices out of step with Europe

By Peter Crichton

IN spite of falling finished pig numbers, UK producers are claiming they are still out of step with the rest of Europe.

These claims are backed by current prices in other parts of the EU.

Pigmeat reference prices in Germany are quoted at 126p/kg deadweight, Spain at 124p/kg, France 113p/kg and Denmark 100p/kg.

The current GB AESA is quoted at 97.66p/kg for the week ending 05 May.

Producers are quick to point out that most EU prices are base quotes, with a lower level of bottom-line deductions, and apply to heavier carcass weights.

In Holland, the average deadweight is 85kg and probes of up to 16mm are acceptable.

In the UK an 85kg “B” grade pig would probably be priced at about 30-40p/kg below the base price.

As far as cull sows are concerned, the imbalance is even greater.

According to trade sources the average cull sow is worth about 130 per head in Germany.

In the UK deadweight quotes are no more than 30p/kg export spec and this equates to 40 per sow after deductions.

To try and correct this imbalance, the NPA is pushing MAFF to provide some exceptional market support measures to overcome the cull sow crisis and to prop up the shoulder market, which has been dragged down by the loss of exports.

At a meeting with MAFF on Friday (11 May) NPA producer group chairman Stewart Houston pressed for market support measures to be introduced.

The NPA is looking for a price support to be pegged at about 70% of EU prices which could lead to a support price of close to 100 for sows if approved by MAFF.

Paul Cheale of Cheale Meats backed up the NPA proposals by saying that he estimated there was a current backlog of at least 40,000 sows in the system and that this was leading to a price collapse for not only breeding companies but many other parts of the industry.

NPA members are claiming that MAFF is dragging its feet over these market support proposals because of the high net cost to the Exchequer.

Under the Fontainbleu Agreement signed up in the Thatcher years, 82.5% of the funding will have to come from the UK government with Brussels only responsible for 17.5%.

In other EU countries, such as Holland, where these measures are in force the member country only has to contribute 50% of the total with the rest coming from EU funds.

Following the end-of-April welfare slaughter scheme cut of 60% – to just 30 per head for cull sows – producers are faced with few options and breeders balance sheets are flagging up massive valuation losses.

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

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