Strong £ is main drag on pigs
By Simon Wragg
STERLINGS strength against the weak k remains the biggest brake on UK pig prices, visitors to the recent Pig and Poultry Fair heard.
"The market has been helped by a modest increases in pig prices on the Continent," said Mick Sloyan of the Meat & Livestock Commission. "But the k is still the single most important factor holding up recovery."
With the adjusted euro-spec average at 94p/kg most producers were now covering finishing costs before interest charges. That had also pulled weaner values up to about £34 a head, allowing specialist rearers to break back into profit.
But the ks dramatic slide against the £ meant that Danish pigmeat, which had been worth 88p/kg when the new currency was launched, could now be bought by UKimporters for just 73p/kg.
But if the new currency did improve, the price of cereals would increase, warned Andrew Sheppard, an economist at Exeter University. With feed accounting for about 70% of variable costs, that could erode any benefit.
Although pig prospects had improved, the gain was marginal, he added. The price cycle had extended to about five years, but was far from predictable. Values were recovering in the UK, but still faced stiff competition from mainland and eastern European rivals. The latter could become big exporters.
Much-needed rationalisation in the UK processing and supply sectors could also add to problems. Such businesses would concentrate in areas of high pig populations, he said. That would increase transport and feed costs to those in other regions. "If you want to produce pigs in Wales, the far north and south-west of England, think long and hard."