Prime pig prices rise as supplies remain tight
Scottish prime pig producers have seen prices rising over the past month; however, they continue to trail last year’s levels by 5.5%, according to the latest market analysis by Quality Meat Scotland (QMS).
“Prices have edged forward as the number of pigs reaching UK abattoirs has dipped and are well below last year’s levels,” said Stuart Ashworth, QMS director of Economics Services.
Although carcase weights are higher than last year, domestic pigmeat production is trailing last year’s levels with production down 2.5% during February when compared to last year.
The results of the UK December agricultural census suggest that supplies of prime pigs will continue to be lower than last year’s levels for the medium-term, as 1.5% fewer fattening pigs were recorded in the UK.
The census also reported a marginal decline on the number of breeding sows in the UK.
“Prices have also started to rise seasonally across Europe as a whole but, like the UK, European prices are still some 3-4% lower than a year ago,” said Ashworth.
Domestically, the latest analysis by Kantar Worldpanel indicates consumer demand for fresh pork remains challenging which helps to explain why producer prices remain subdued compared to a year ago.
“International trade opportunities, however, remain positive with demand from China returning to growth after a difficult 2018,” said Ashworth.
The European Commission reports a growth of 14% in exports to China in the first two months of the year compared to the same period last year, with growth also occurring in other important Asian markets like Japan, the Philippines and Vietnam.
“The UK also reported growth in trade with China during January,” added Ashworth.
Although the UK is only around 60% self-sufficient in pigmeat and pigmeat products, international trade plays a vital role in maximising carcase returns by providing valuable income for parts of a pig carcase not popular with UK consumers.
“At this level of self-sufficiency, imports play an important part in the UK pigmeat market,” said Ashworth.
“Consequently, the announcement earlier this week that in a no-deal Brexit situation the UK will introduce low levels of tariffs on pigmeat and pigmeat products will offer some support for domestic producer prices.
“Equally, though, a no-deal Brexit would mean UK pork exports to Europe, particularly important in the sow meat market, will face tariffs which will act as a break on cull pig prices in the case of a no-deal Brexit.”