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QMS (Quality Meat Scotland)


05 March 2012

QMS Pig Market Report - February 2012QMS Pig Market Report - February 2012

Farmgate pig prices have fallen back steadily since the turn of the year and dropped below the 140p/kg dwt mark in mid-February for the first time in ten months.
QMS - Quality Meat Scotland

Pig Prices and Supplies

Farmgate pig prices have fallen back steadily since the turn of the year and dropped below the 140p/kg dwt mark in mid-February for the first time in ten months. Nonetheless, values remain more than 3% higher on the year.

The expansion in UK production now appears to be exerting downward pressure on prices with demand in a lull following the festive season. Average weekly kill figures for December and January show that UK abattoirs slaughtered 5% more prime pigs than 12 months before.

The market for weaners has shown more stability in recent weeks with prices averaging around £44.50 a head. The combination of lower input costs and better prices for finished pigs in the final quarter of 2011 resulted in producer confidence returning. Weaners are currently worth 9% more than at this time last year.

Having eased back in January after Sterling strengthened against the Euro, cull sow prices have begun to move forwards once again. The combination of tight supplies and strong demand on the continent, plus competition between domestic processors has allowed values to move higher.

Feed costs remain significantly lower than year earlier levels. However, the cost of grain has moved steadily higher since December due to supply-side worries. In addition, oil prices have spiked to record levels in Sterling terms as sanctions have been imposed on Iranian oil exports and Sterling is weaker against the US Dollar than when oil prices quoted in Dollars peaked in the first quarter of 2011. Subsequently fuel and energy costs have risen. It is therefore likely that some producers will have noticed a tightening in their margins.

Producer prices in the EU recovered by 6% in February and the average price of a grade E pig stood at €1.58/kg dwt in the third week of the month. With GB prices falling, the gap between the UK and EU averages has narrowed to 5c/kg (3%) from 17c/kg (13.5%) a month ago. This has reduced the ability of cheap pigmeat imports to compete with UK product.

UK pork exports in 2011 expanded by 10,200t year-on-year to total 144,400t. Shipments were down on a year earlier for the second successive month in December, and were at their lowest since January.

Provisional UK trade data shows a 2.5% increase in pork imports during 2011 with volumes reaching 371,700t. However, monthly imports in December trailed year earlier levels for the third time in four months.


March 2012

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