Pig prices set to rise?

By Peter Crichton

AN improvement in pig prices could be just around the corner, with pigmeat quotes throughout the EU moving up sharply, as forecast by industry analysts.

In the UK the GB AESA remained almost static at 95.89p/kg.

But spot quotes for next weeks pigs are forecast to move above the 100p benchmark and regain 8-10p/kg compared with January returns.

Meat traders are pointing to three separate factors influencing this rise.

The first is that live UK pig supplies are continuing to slide, and further evidence is emerging that PDNS and PMWS are hitting numbers in many parts of the country.

The second effect on the market is the continuing relative strength of the Euro which has improved in value by almost 10% over the last six months.

This has effectively increased the cost of imports and at the same time made UK pig meat exporters more competitive.

The final part of the equation is the BSE saga in Germany and other European countries.

With consumer confidence still very low as far as beef is concerned, buyers are switching to pork as an alternative and this has seen AEX pigs futures prices romping ahead in Holland.

May and June quotes are close to 110p/kg for a heavy 85kg- 90kg carcass which translates to an equivalent UK price of 115-120p.

UK retailers are reporting fairly strong sales, with the leg market oversold and manufacturing meat, both home-produced and imported, also on the rise.

The cull sow market has clawed back almost all the losses seen five weeks ago when the German market collapsed.

Current deadweight export specification quotes are now close to 70p/kg compared with just over 40p/kg a month ago.

A similar improvement in weaner values has filtered down to the store pig market, with the FARMERS WEEKLY 30kg ex-farm price approaching 39/head for PDNS and PMWS free pigs.

The latest Signet reports are flagging up a continuing slide in the farm gate to retail price gap, with the combined pork and bacon spread quoted at 250% compared with 413% in December 1998 and 380% in December 1999.

This is an indication that the producer price is now catching up with retail levels.

Signet also illustrates how high a proportion of pig meat prices was going to retailers and processors during the difficult times the industry was facing two years ago.

One note of caution for producers is that pig ration prices are now starting to rise due to higher soya and cereal costs.

Rearing herds are now paying 5.5% more for home-mix rations than they were a year ago.

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