By Peter Crichton
LOOKING ahead to the New Year there are reasons for a certain amount
of hope for those UK pig producers still in business.
The UK sow herd is falling and the same trends are being observed in
some of the major EU pig producing countries.
Although the UK weekly kill is still about 275,000 head analysts
expect this to fall by as much as 25% by the end of next year,
according to current cull sow slaughtering levels.
Better demand coupled with a dip in the number slaughter pigs
available has already led to a lift in spot prices at a time of year
when demand normally falters.
This weeks spot baconer quotes are 5p to 7p/kg over the UK AESA now
standing at close to 74p/kg. Light pigs have been traded at up to
92p/kg flagging up the possibility of better times ahead.
The abattoir sector is also starting to recognise the need to pay more
for pigs next year to maintain supplies with talk of cost of
production linked contracts on the table of about 100p/kg.
Cereal trends also point to stable feed prices in the year ahead and
with the UK herd continuing to contract this should increase the
availability of cheaper compounds.
One of the main issues to be addressed next year is predicted to be
the need for UK producers to provide pigs fed on GM free feed.
Some of the leading retailers are already expected to be looking for
product that can be sold under this label soon.
As many imports will find it harder to comply than home producers this
could provide the domestic industry with a further trading edge in
their battle for survival into the next Century.
Disease continues to challenge pig herds throughout Europe and the
threat of PDMS and PMWS also has to be faced.
At the same time CSF continues to rumble on in Spain and Portugal.
These factors could also help to put the lid on runaway expansion in
the size of the overall EU herd.
There is evidence that recent food scares have led to more consumer
interest in UK pigmeat and Farm Assured meat looks to have a better
future than many imports.
However, the strength of the Pound probably remains the main factor
which will ultimately determine how many UK producers survive over the
next 12 months.