Sustainable recovery in pig market
Sustainable recovery in pig market
By James Garner
PIG prices at last look as they are on the move upwards after another dismal January when BSE in Germany and hard-up UK consumers put the mockers on a market that fell for six consecutive weeks.
It is, however, not uncommon that pig prices fall in January. In fact some pig producers may want to miss the whole month out in future as last months fall was the seventh time in the past 10 years that prices have been squeezed.
Better news is that in six of these the price has picked up from mid to late February, says Signets Derek Wells.
Perhaps pig farmers should eagerly anticipate St Valentines day, particularly if it signals a sustained price recovery this time. Market pundits agree that the fundamentals point to a better long-term future.
Reports so far this week hint at better prospects. The Meat and Livestock Commissions figures for Mondays markets show liveweight prices rising 2.3p on the week to close the day at 77p/kg.
UK slaughterings are down to just 220,000/week, says Mr Wells. Illustrating just how slack processing is, reports that UK Grampians factory in Haverhill, Suffolk, with a capacity of 20,000 pigs/week, is currently killing less than half that figure.
With UK supplies at their lowest ebb, imports are meeting demand and keeping pressure on prices, but recent evidence that prices are improving on the Continent should help the domestic scene as well.
In Mr Wellss monthly league table of pig prices, UK has now sank to fourth, below Germany, France and Spain. And Dutch AEX futures were up to 100p/kg last week for May, says Peter Crichton.
Currency moves are helping too, with the £ showing some signs of weakening against the k, says Mr Wells. But UK prices need to improve somewhat yet.
"Current UK Euro spec average prices of 96p/kg before deductions are not enough and probably about the break-even point for the national herd."
He reckons that taking all costs into account, most herds would break even at about 90p-95p/kg, although it varies according to overheads and borrowings.
Nevertheless, better demand for pig meat on the Continent and a stronger k, plus a big drop in UK slaughterings suggest that the much heralded pig price recovery may be on its way.
"If we could guarantee a pig price of 110p/kg for a fairly long time, then producers could budget on that," adds Mr Wells. *
PIGMARKET
• Fundamentals look better.
• Exchange rate helping.
• Continental prices on up.
• UK slaughterings down.