Global demand strengthens European pig prices
The latest Quality Meat Scotland analysis has revealed that farmgate prices for Scottish pigs are the strongest they have been since mid-2014 and 38% higher than the same period last year.
The rise in pig price for Scottish producers did, however, fall to 21%, when quoted in euros and allowing for exchange rate movements, as across the UK and Europe, the basic supply of pigmeat was slightly lower than last year.
Quality Meat Scotland’s head of Economics Services, Stuart Ashworth, commented that the euro price increase for Scotland looks modest when compared with the 33% year-on-year increase in the average pig price across the European community and added: “Defra slaughter data shows prime pig slaughtering to have fallen about 2.5% year-on-year during March and to have tightened further in April, although slightly higher carcase weights mean the decline in pork production is not so great.”
However, he noted that the UK December census showed a growth in the number of young pigs on-farm that would indicate some growth in UK production as the year progresses.
He also explained that the most striking feature in the current pigmeat market is the role of international trade in price determination, noting: “Globally, there has been significant growth in international trade and particularly in trade in the Asian region.
“European Union trade data shows a growth in exports to China during 2016 of 63% and growth continuing into 2017 with January and February exports to China from the EU up 13%.”
Elsewhere, China, Japan and South Korea are all expected to import more pigmeat in 2017 than they did in 2016, with Mr Ashworth adding that the UK has benefited from growth in Asian demand, which has seen exports grow by one third to make up one quarter of all UK pigmeat exports.
In the UK market, overall use of pigmeat is increasing, according to Ashworth, who added: “In the final quarter of 2016 the total volume of pigmeat available to the UK market increased by 6.5% and while some of this may have resulted in increased stocks, it does suggest greater use of pigmeat in delicatessen and processed products and out-of-home eating.”