Pig market stabilises after period of declining prices

Pig market stabilises after period of declining prices

Producers of prime pigs have found some degree of stability recently at around 132.5p/kg, after a period of declining prices, according to the latest analysis by Quality Meat Scotland (QMS).

Stuart Ashworth

Stuart Ashworth, QMS head of economic services.

Despite this prices are around 18% lower than this time last year whilst the European pig market has also been working in a declining market. “The principle reason for this was a combination of exclusion from the Russian market, which began a year ago, and a growth in pigmeat production of over 2.5% in the second half of 2014 compared to the year before,” observed Stuart Ashworth, QMS head of economics services.

Over 2014, European pigmeat exports fell by 5% while annual production increased by 1.4%, which led to pressure on producer prices.

As a result of this pressure the European Commission introduced private storage aid in early March. This aid involves the Commission paying the storage cost for pig meat put into cold store for a minimum of 90 days.

One concern Ashworth had was that most of the pigmeat in store must come out after 90 days. This would be the beginning of June when prices should, based on historical trends, be higher, but this extra supply may cool the trade.

Scottish producers did not benefit directly from the European price recovery as, although prices stabilised, they have not increased.

“The UK market remains well supplied. Higher slaughter numbers and heavier carcass weights meant production increased at the same time exports declined and, although imports also declined, available pigmeat increased.

“However, despite the strength of sterling and low European prices, pigmeat has not flowed into the UK. This suggests some loyalty among UK consumers for UK pigmeat,” Ashworth.

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