UK prime pig prices expected to remain firm
Farmgate prices for prime pigs currently stand at their highest level since December 2014, according to the latest analysis by Quality Meat Scotland (QMS).
Stuart Ashworth, head of economic services, QMS.
Following steady, week-on-week increases since the low point of March 2016, pig prices have risen by 28%, and currently stand 12.5% higher than 12 months ago.
According to QMS head of economic services, Stuart Ashworth, sterling weakness has had a beneficial affect by making the UK average price lower than the European average price, when quoted in Euros.
“This has meant that pork and pigmeat products imported from Europe have become more expensive, and therefore have not been a constraint on UK producer prices to the extent they have in the past,” he said. “Similarly UK exports of pigmeat have become more attractive without having to bid down domestic prices.”
“With Sterling expected to remain weak, and possibly weaken further in a febrile money market, falls in European pigmeat supplies and strong demand from China are likely to mean that UK pig prices will remain firm for some time.”
Ashworth also observed that additional market fundamental influences have been at play as well. For example, strength in the domestic farmgate price has been achieved at the same time as UK pigmeat production has been increasing.
“Slaughter statistics show UK prime pig weekly slaughterings have changed little compared with the previous year, during the past quarter. However, because of increased carcase weights, the volume of meat produced has increased slightly,” he said.
Meanwhile, in the retail market, Kantar Worldpanel research shows retail sales of pork and pork products struggling to match year-earlier levels despite lower retail prices.
“Domestic retail sales are therefore not driving farm gate pig prices at the moment. What is driving prices is changed trade patterns and market balance in other parts of the world,” Ashworth commented.
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