Prime hog prices strengthen as supply tightens
Prime hog prices strengthen as supply tightens
Prime hog prices have started 2014 on a rising trend with prices which are comparable to 2012 and some 25% higher than 12 months ago, according to the latest Quality Meat Scotland (QMS) analysis.
Underlying this price strengthening is a slow tightening in the supply of hogs, observed Stuart Ashworth, QMS Head of Economics Services.
Scottish auction market throughputs during December were 3% lower than last year and across GB as a whole they were less than 1% higher, he said. This compares to October and November when GB auction throughputs were 17% and 9% higher respectively. So lamb supplies, in comparison to last year, started to tighten during December and auction prices began to rise.
“Between June and November 2013, UK abattoirs handled 3.5% more lambs than in 2012. When placed in the context of a June census which showed a UK lamb crop around 1% higher than in 2012, the increase in slaughterings has already absorbed more than the increase in the lamb crop. Hence, hog finishers can enter 2014 with an expectation of further tightening in slaughter hog availability,” observed Mr Ashworth.
December cull ewe marketings through GB auctions ran some 4-5% higher than last year, while ewe slaughterings between June and November across the UK have been running some 10% higher than last year.
“While this level of culling does not bode well for the size of Scottish and Northern Irish breeding ewe flock, higher levels of gimmers and ewes in the English and Welsh June census mean that the number of ewes and gimmers used for breeding in autumn 2013 may still prove to have been higher than 12 months earlier,” he said.
Meanwhile, Irish ewe slaughterings were 11% higher in the second half of 2013 than 2012, while their lamb kill was unchanged. These slaughter values when compared with June census results, said Ashworth, suggest a lower carryover of Irish hogs into 2014 and the potential for a further decline in the number of ewes used for breeding in autumn 2013.
While Irish and UK lamb slaughterings may have been running higher than year earlier levels between June and November, that was not the case in France where the lamb kill was 4% lower over this period.
“This created some demand for increased UK and Irish imports which also helped to support UK and Irish producer prices in late 2013,” said Ashworth. “Despite some reduction in sheepmeat consumption in France in recent years, the fact that the French ewe flock has declined by more than 20% over the past decade means that opportunities continue to exist for Scottish exporters.”
The tightening of supplies across the UK and Ireland favour firm market prices.
“However, ultimately consumer demand will drive the market,” he added. In this respect retail market intelligence is favourable, showing growth in lamb consumption over the past quarter at the expense of beef. Nevertheless, the growth in consumption has slowed as the retail price of lamb has increased in recent weeks reflecting some of the producer price movement.”
