Strong Pound hammers UK pig producers

By Peter Crichton

DESPITE recent reports that the end of pig-movement restrictions in the Netherlands might help stimulate prices, UK pig prices have dropped.

Home market returns took a direct hit last week with spot quotes as the Pound rose to a nine-year-high. Baconers are down by as much as 10p/kg deadweight – a fall in producer returns of around £7.50 per pig.

With the most recent cost of production figures for a typical breeder/finisher quoted at a break-even figure of 103p per kg deadweight, many in the industry are wondering just how long some undercapitalised units can continue.

The stall-and-tether ban, which comes into effect in the UK at the end of this year, will add yet more financial pressure to intensive indoor breeding units at the worst possible time.

A lift in cull-sow prices – which are also languishing at low levels – could herald the start of a major exodus from the industry. Cull-sow returns are as low as 62/kg deadweight, providing extra incentive for those tempted to quit to take the plunge.

As predicted in last weeks commentary, finished pig prices have a bleak outlook at what is usually a buoyant time of year in the run-up to Easter. Last Friday (27 March), the major buying day for spot pigs, most quotations were in the 90-95p/kg range according to weight. This trend is expected to be repeated again tomorrow (3 April) with heavy baconers likely to fall into the 87-90p/kg range and lighter weights finding to hard to exceed 95p/kg.

The Adjusted UK Spec GB Price for the week ending 28 March was at 98.06p and this weeks price will reflect the downward track of the spot market.

On the positive side, Andrew Garvey of the Meat and Livestock Commission has reported a dramatic rise in sales of UK pork and mince.

Sales through supermarkets alone have risen by 17% for the last quarter of 1997 compared with the same period a year earlier. Sales of pork mince increased by a resounding 26% for the same period.

But some leading producers claim that most point-of-sale and television promotion needs to be stepped up do avoid demand losing momentum. Critics argue that the MLC cannot promote all three meat species at once.

This has led to calls that the MLC, NFU and British Pig Association should be merged into one body to represent the interests of all UK pig producers and to deal with the question of species promotion as one entity.

The industry claims that one powerful body such this will present a much more effective voice for the UK pig producer and will be more effective as an exclusive pig lobby.

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