Farmgate pig prices have seen an increase after a prolonged period of decline, Iain Macdonald, senior economics analyst at Quality Meat Scotland (QMS) has reported.
According Macdonald the opening week of May was the fifth consecutive week, and seventh week in nine, to see an increase in the GB Standard Pig Price (SPP).
“These increases mean that the SPP has risen by more than 2.6p/kg from its low point in the week ending 19th March to reach 114.7p/kg dwt in the week ending 7th May.”
Macdonald observed, however, that farmgate prices have remained well behind 2015 levels and the squeeze on producer margins continues. Some significant increases in the price of soyameal in recent weeks, following heavy flooding in the key soyabean growing regions of Argentina, will have also been unhelpful to pig producers watching their bottom line.
“Nevertheless, this was still nearly 17p (13%) below its level in the same week of 2015,” he said.
Looking at the factors which have been driving the price higher recently, he said historical slaughter statistics for the UK show that weekly deliveries of prime pigs to abattoirs tend to be at their annual lowest in April and May.
Supporting evidence from the SPP price report shows that the number of pigs handled by GB reporting abattoirs has fallen back since Easter, down 4% in the three weeks to 7th May when compared with the three weeks to 19th March.
Macdonald continued: “In addition to lower numbers, those pigs being supplied to abattoirs tend to have a lighter carcase weight in April and May than earlier in the year. UK slaughter data shows that the average carcase weight in May tends to be around 1% lower than two months previously.”
“In the SPP sample, the average carcase weighed 82.8kg during the first week of May, down from 83.7kg in the week ending March 19. As a consequence of lighter carcase weights, the volume of pigmeat produced will have tightened more significantly than slaughter numbers, placing additional upwards pressure on the market.”
The result of lower carcase weights has meant that while per kilo farmgate prices have risen by 2.3% between mid-March and early May, the price of the average carcase rose more slowly, up 1.2% to £94.94.
“The flip side of this is that higher carcase weights than last year mean that the average carcase price is down by 12% year-on-year compared with the 13% decline in per kilo prices.
“However, in the same period last year, there was a similar tightening of weekly pigmeat supplies yet the SPP was still edging lower. The difference this year is that reports from the demand side have been better.”
During the 12 weeks to April 26 2015, GB households bought nearly 8% less pork than a year earlier. In the corresponding period this year sales volumes began to recover, rising by 0.7%.
This story was originally published on a previous version of the Meat Management website and so there may be some missing images and formatting issues.
