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QMS (Quality Meat Scotland)

18 April 2012

QMS Market Report - March 2012QMS Market Report - March 2012

Ex-farm pig prices advanced through March after declining during February.
QMS - Quality Meat Scotland

Pig Prices and Supplies

Ex-farm pig prices advanced through March after declining during February. Beginning the month at 139.5p/kg dwt they then rose by 3p/kg over the following three weeks. At 142.4p/kg dwt, prices are back to the level at which they closed January and are up more than 4% year-on-year.

Growth in UK production volumes slowed markedly in February to just 0.5% on the year from around 5% in the previous two months, and this fuelled the recovery in prices.

Scottish slaughterings were 8% higher than last February. However, the addition of a processing plant last September prevents a direct comparison.

Weaner values rose during March to stand at nearly £46 a head in the third week of the month, up 2.5% since the month commenced and 11% higher than at this time last year. Rising weaner prices reflect improved producer confidence fuelled by a belief that input costs will remain below their 2011 peaks and finished pig values are set to increase.

Competition amongst domestic processors over a tightening supply of cull sows has allowed values to move forward for a second month. Strong demand and tight supplies on the continent has also helped to underpin prices. Subsequently, prices for export spec sows reached the 120p/kg mark in mid-March for the first time since April 2009.

Despite grain costing 15% more than at the beginning of 2012, it remains cheaper than at this time last year by a similar proportion. The rise of oil prices to record levels in Sterling terms during March will have generated some pressure on margins due to spill-over effects on fuel and energy prices. While it is likely that some producers will have seen margins narrow as 2012 has progressed, market conditions are generally more favourable than last spring.

Producer prices in the EU for grade E pigs in the third week of March were unchanged from where they had finished February, at €1.61/kg dwt. GB prices reopened a 5c/kg (3%) premium over the EU average having fallen behind them at the end of February.

UK pork exports in January 2012 rose by 2.5% year-on-year to 10,250t. Nevertheless, a widened premium for GB prices over the EU average during the month meant that export volumes fell to an eleven month low.

Pork imports contracted significantly when compared to the same month a year earlier with volumes down 13%. Furthermore, imports were at a 23-month low and have now trailed year earlier levels in four out of the last five months.

April 2012

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