ThePigSite.com - news, features, articles and disease information for the swine industry

AHDB Pig Market Weekly


12 June 2014

AHDB Pig Market Weekly - 12 June 2014AHDB Pig Market Weekly - 12 June 2014

Demand for meat in the EU has generally slowed since the economic downturn in 2008, particularly for red meat. However, in comparison to beef and lamb, pork has performed relatively well.

AHDB

EU pig meat demand holding up

Data so far for 2014, from key countries including Germany, France and Italy, provide further confirmation of this. For France, Kantar Worldpanel data up to 20 April show much higher fresh pork purchases (up 5%), despite a 2% increase in prices, indicating firm demand. The market for ham and other charcuterie products is more important than fresh pork, accounting for one third of total meat purchases, and volume growth amounted to almost 3%. Pig meat was the only category to record an increase as both beef and lamb purchases were well down, as a result of higher prices compared with the same period in 2013. Even poultry meat purchases were marginally lower.

In contrast, in Germany, during the first four months of 2014 there was a 1% decline in fresh and frozen pork purchases; further falls may have been mitigated by declining prices (by 2%). Even so, demand for pork held up better than competing meats at a time when meat sales have been slow according to AMI. In the case of poultry meat, higher retail prices (up 2%) contributed to the 2% reduction in purchases, while household purchases of beef were 4% lower. Demand for minced meat was also below the previous year’s level, given the 5% fall in volumes purchased. Data for Italy indicate that household purchases of pig meat in January and February also showed a decline, especially fresh pork, with salami holding up somewhat better.

EU pig slaughterings still low

The latest EU-28 pig slaughtering figures published by Eurostat placed monthly throughputs 2% above the previous year’s level. However, the increase was a result of one extra working day during the month as Easter fell later this year. In fact, throughputs on a per-working day basis were actually 3% down on March 2013, indicating some tightness in supplies in the third month of this year. This brings slaughterings in the first quarter of 2014 to 61.6 million head, marginally higher compared with the same period in 2013, although this is again inflated by the later Easter. Overall EU pig meat production in March reached 1.82 million tonnes, also 2% up on a year earlier as average carcase weights were virtually unchanged.

Spain recorded the largest year-on-year increase, with March pig throughputs up 14%, followed by Denmark, where numbers were around 8% higher on the year. Pig supplies in many other key markets, including Germany, the Netherlands, Poland and France, increased by only around 1% on a year earlier indicating tight supplies here. In Italy and Belgium slaughterings were lower than last year despite the extra working day, with 7% and 4% declines in throughputs respectively. Few countries have released figures for April so far, with a mixed picture on slaughtering trends.

UK pig prices

The EU- spec DAPP for the week ended 7 June edged up slightly to 164.53p per kg. The finished pig price has remained around the 164p mark for the fifth consecutive week, indicating a sluggish market. The DAPP stayed below the previous year’s level, being down by 0.73p per kg on the year. During the week, estimated slaughterings totalled 156,600 head. Although a recovery from the previous Bank Holiday week, this was almost 4% (6,200 head) down compared with the same week in 2013. Despite tight supplies, finished pig prices remain somewhat subdued, indicating some easing in demand. Carcase weights fell further to 79.13kg, the lowest since early December last year. The week-on-week difference showed a 660g drop, although the weekly average weight remained marginally above year earlier levels.

The APP for the week ended 31 May reached 166.29p per kg, 0.30p higher than a week earlier. During the same week, the EU-spec DAPP stood at 164.50p per kg, indicating a 1.79p difference between the two price series.

After a fall in the previous week, the price of a 30kg weaner rose to £56.43 per head for the week ended 7 June. The weaner price continued to show some volatility but no clear direction and this represented a week-on-week change of 55p. The relatively high prices this year may reflect firm producer confidence, helped by the weak feed prices as of late. The annual difference shows weaner prices are still around £5 above the level for the same week last year. On a similar note, the 7kg weaner price also increased from the previous week, to £41.34 per head for the week ended 7 June.

Tight US supplies push up prices

The impact of the PEDv disease in the US was increasingly evident in the first third of this year. Latest figures from the USDA show a 3% decline in the number of pigs slaughtered between January and April and throughputs fell even more sharply compared with October 2013. The fall reached 7% in March and numbers were 5% down on the year in April. Despite lower slaughterings, producers were able to offset most of the overall decline in production by adding extra weight onto the animals. Consequently, pork production in the first four months of this year was only marginally down compared with 2013.

The supply shortage and the expectation of a further disturbance is the US pig market resulted in a record increase in the US barrows and hogs price which reached just above $89 per 100lb lw in April (equivalent to about £1.55 per kg dw). At the peak in April, the gap between this year and the same month in 2013 widened to around $31 per 100lb, despite prices having been close to 2013 levels earlier in the year. The average monthly price for May showed that pig prices eased during the month, indicating a possible change in the supply-demand balance. However, latest forecasts suggest further declines in overall US pork production in the coming months, with output set to be down by around 2% for the year as a whole.

Further improvement in breeding herd performance

According to latest figures from Agrosoft, the physical performance of GB breeding pigs showed some further improvement in the 12 months to March 2014. The average number of pigs born alive per litter rose to a record 11.95, nearly half a pig extra compared with a year earlier. With the number of litters per sow little changed and a small fall in mortality rates, this meant that the number of pigs weaned per sow per year averaged 23.36, up from 22.60 in the previous 12 months. However, this figure was slightly lower than in the 12 months to December 2013 due to drop in the number of litters per sow, perhaps suggesting more problems with seasonal infertility this year. The top 10% of producers farrowed almost 13.4 pigs per litter and weaned 28.65 per sow.

There were improvements in litter sizes for both indoor and outdoor producers. The number of pigs born alive indoors was 12.38, up from 12.06 a year before. Meanwhile, the outdoor figure rose from 10.96 to 11.14. As a result, the average number of pigs weaned per sow per year by indoor producers was 24.58, a rise of nearly half a pig compared with the 12 months to March 2014. The number of pigs per outdoor sow was, however, lower than the previous year at 21.10, due to an increase in mortality rates and a slight fall in the number of litters per sow.

Feed market update

Nov-14 UK feed wheat futures closed at £140.75/t on Tuesday, down £1.30 from last week, reaching another contract low. Nearby prices closed at £142.50, also down (£4/t) on last week’s price, and the lowest since December 2011. UK grain prices remain depressed as new crop prospects across the Northern Hemisphere look good, so far. The latest DEFRA GB animal feed production statistics released last week revealed that GB feed compounders produced 12% less compound, blends and concentrates in April 2014, compared with April 2013.

On Friday, Nov-14 Paris rapeseed futures reached the lowest level since late January, closing at €347.25/t, while the nearby price reached its lowest settlement price since July 2010. Prices have increased slightly this week, with the Nov-14 futures contract closing at €350.25/t and the nearby price closing at €346.75/t on Tuesday. Tight old crop supply in the US is continuing to offer some support to oilseed prices. As at Friday, the UK Hi Pro-soyameal (Ex-store, East Coast) price was £366/t (June delivery), down £2 on the week. Rapemeal prices (ex-mill Erith, June delivery) were £3 higher.

To read more about the latest developments in the feed market click here.

Higher producer share of retail pork price

The latest farm to retail price spread calculations by AHDB/BPEX showed that producers received 41% of the total retail price in May. This was 1% higher than the previous month, as a result of an uplift in the average farmgate price coupled with a slightly lower retail price in May. However, producers were in a better position a year before, when their share was 42%. The May figure for retail bacon prices is not yet available but the producer share of the retail price in April remained unchanged at 37%. This was also very close to the level last April.

Pork retail prices showed a mixed picture in May, compared with the month before. Some cuts recorded price declines, including boneless leg (down 3%), boneless shoulder (down 2%), loin steaks (down 5%) and diced pork (down 2%). However, fillet end leg and fillet of pork recorded 3% and 1% increases, while other average prices remained largely unchanged. In contrast, retail pork prices generally increased in the year to May across most of the cuts. The exception was traditional pork sausages and boneless leg, prices for which fell by 3% and 2% respectively. The largest rise was recorded for loin chops, up 13% on a year earlier, followed by fillet end leg which increased by 6% on the year. On average, the retail pork price in May was around 3% higher compared with the same month in 2013.

DOWNLOAD REPORT:- Download this report here

Our Sponsors

Partners


Seasonal Picks

The Commuter Pig Keeper - 5m Books