Pig prices to stay below break-even MLC

By Simon Wragg

PIG production may have fallen in the UK, but increases elsewhere in the EU suggest prices are likely to remain below break-even until mid-year.

The UK sow herd has fallen to 665,000, according to MAFFs November census.

As a result, pig slaughtering for 2000 will fall to 13 million head, down 1.4m on last year, Mick Sloyan of the British Pig Executive told a recent MLC Outlook 2000 conference in London.

He added that EU production should fall by 1.5% as producers react to lower prices.

But the Brussels view of the EU situation could not be more different.

Having risen 10% between 1996 and 1999, continued growth – particularly in Spain – would lift output from 17.8m tonnes to 18m tonnes by 2004, said the commissions Thorkild Rasmussen.

Much of the increase could be absorbed in higher consumption in the EU, he suggested.

And it will need to be, given that the WTO-enforced cut in EU export refunds for pigmeat from 800,000t in 1999 to just 444,000t this year could put a brake on trade outside the EU.

But an easing of world currency markets and a 4-5% fall in output in the USA, Far East and Russia should ease world competition.

Even so, UK producers can expect a difficult trading period early in 2000.

Not only are they dogged by the strong Pound, but they also face the proposed release of 156,000t of pigmeat in EU stores by the end of April.

Amsterdam futures markets suggest a 10p/kg increase by mid-June, which would take the UK gross price near breakeven.

Any recovery beyond that is likely to be “gradual rather than dramatic”, warned Mr Sloyan.