UK pig prices are rising as the supply is limited
Prime pig prices in the UK have grown between January and February due to tighter supply, according to the latest Quality Meat Scotland (QMS) analysis. However, prices are 5.5% below last year's levels.
"Prices have edged forward as the number of pigs reaching UK abattoirs has dipped and are well below last year’s levels. Although carcase weights are higher than last year, domestic pigmeat production is trailing last year’s levels with production down 2.5% during February when compared to last year", explained Stuart Ashworth, QMS Director of Economics Services.
The results of the UK December agricultural census suggest that supplies of prime pigs will continue to be lower than last year’s levels for the medium-term, as 1.5% fewer fattening pigs were recorded in the UK. This decline in pig numbers is repeated across the European Union where the European Commission report the pig herd to be at its lowest level for two years; although Spain, with the largest pig herd in the EU, does show continued growth.
The latest Kantar Panel analysis in the UK market shows that consumer demand for fresh pork remains challenging, partially explaining why producer prices have decreased compared to February 2018.
The UK is only around 60% self-sufficient in pigmeat and pigmeat products but exports are playing a vital role in maximising carcase returns by providing valuable income for parts of a pig carcase not popular with UK consumers.
"International trade opportunities, however, remain positive with demand from China returning to growth after a difficult 2018. The European Commission reports a growth of 14% in exports to China in the first two months of the year compared to the same period last year, with growth also occurring in other important Asian markets like Japan, the Philippines and Vietnam. The UK also reported growth in trade with China during January," added Mr Ashworth.
Imports, on the other hand, are expected to offer some support for domestic producer prices as the British government announced low levels of tariffs on pigmeat and pigmeat products in case of a no-deal Brexit. Still, this scenario is going to block most part of the exports in the EU market, particularly in the sow meat market, where tariffs which will act as a break on cull pig prices.
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