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QMS (Quality Meat Scotland)


13 April 2015

QMS (Quality Meat Scotland) March 2015QMS (Quality Meat Scotland) March 2015


QMS - Quality Meat Scotland

Pigs

Prices and Supplies

Pig producer prices continued to decline through February due to a well supplied market. However, towards the end of the month, spot prices did pick up from their low point, indicating that the imbalance between supply and demand had narrowed. At 133p/kg dwt in the final week of Febraury, prime pig prices had fallen by nearly 11p/kg (7.5%) since the Christmas week and were down 30p/kg (18%) year-on-year.

Weaner prices have steadied in recent weeks, perhaps in expectation that the market for finished pigs will begin to turn in the coming weeks, given the historic trend of rising prices through the spring and summer. Nevertheless, at the end of February, prices for 30kg weaners remained 21% lower than a year earlier. Meanwhile, the annual discount for 7kg weaners narrowed to 15%.

UK abattoirs proved well supplied with prime pigs in January. At 962,600 head, slaughterings were up 2.5% year-on-year and were at their highest January level since 2002. Kill numbers were up in line with the UK average in E&W and NI, but rose more slowly in Scotland.

Prime pig carcase weights reached a new record high of 82.4kg in January at UK abattoirs. This was an increase of 1.2kg on the year and was fractionally higher than the previous record set in November 2014. Lower feed costs and producer prices than a year earlier gave producers an incentive to take pigs to heavier weights. Adding heavier carcase weights to the higher slaughter numbers meant that UK prime pigmeat production rose nearly 4% year-on-year in January to 79,300t.

The prime pig kill at Scottish abattoirs was almost 1% above its year earlier level in January as throughput totalled 26,900 head.

During the first month of the year, UK abattoirs produced a total pigmeat volume of 82,900t. This was a year-on-year increase of 3.5% as higher prime production was partially offset by a 1.5% decline in sow meat production. Prime pigmeat accounted for almost 96% of total production; up marginally on twelve months before.

In the 4 weeks to January 4, Kantar Worldpanel data for GB household pork consumption volumes showed a year-on-year 1% decline. This was despite retail prices falling by an average of 7.5%. It was lower priced leg and loin roasts that failed to tempt shoppers - sales fell by approximately 10%. However, the volume of pork chops & steaks retailed edged higher as spending fell more slowly than prices. There were also increased sales of shoulder roasts, up 10%, as a 16% decline in the average retail price meant that less money was required to buy a higher volume. Although overall sales disappointed, the commitment to domestically produced pigmeat is evident within the figures. Sales volumes of home produced pork rose by more than 2% in the 12-week period and by 3% in the 4- week period.

The EU average producer price for Grade E pigs rose strongly through February, increasing by 10% to reach €1.43/kg dwt (105p/kg dwt). Although this was a 5-month high, it remained 4.5% lower than a year earlier. When converted into sterling, prices picked up by 7.5% during February but still fell 15% short of year earlier levels.

The largest monthly gains of around 15% accrued to producers in Belgium, Holland and Poland. There were also significant gains of 9-10% in France and Spain and 12.5% in Germany. However, prices lifted more slowly in Denmark, rising 6.5% during February.

While farmgate prices had been running well behind year earlier levels throughout the EU, this has changed for a number of Member States following the recent upturn. Indeed, Polish producers were paid 9% more for their pigs at the end of February 2015 than 12 months before. Meanwhile, German prices were only marginally lower and they were down by less than 2% in Holland. Nevertheless, significant price gaps still remained in France (-9%), Denmark (-12%) and Spain (20%).

Having trailed year earlier levels in 3 out of the past 4 months, UK pigmeat exports finished the year on a high, rising 12% in December to 16,400t. This increase will have been enabled by higher domestic production. However, it had to come at lower prices due to the well supplied European market and rise in the value of sterling. Pork shipments rose 13% to 15,000t while bacon & ham exports increased by 3% to 1,400t. This meant that cured product accounted for approximately 8.5% of total pigmeat exports compared with 9% in the final month of 2013.

Whereas sales of fresh and frozen pork to Denmark and Holland were 15-20% lower than a year earlier in December, UK exporters managed to significantly increase volumes into Ireland, China and Hong Kong. All 3 showed growth rates of around 30-40%. Exports to the UK’s largest market, Germany, also increased; though at a slower pace of 5.5%.

There was a marginal year-on-year increase in UK pigmeat imports during December. Trade totalled 53,900t, up 0.5% year-on-year. Although pork imports rose 3.5%, this was nearly offset by a 3.5% decline in bacon & ham. Pork imports reached a 7-year high for December of 32,500t. Meanwhile, 21,450t of cured product was brought into the UK. This meant that 40% of the total quantity imported was bacon & ham; down 1.5 percentage points when compared to a year earlier. The average value of imports was considerably lower than a year earlier; indeed pork shipments from the EU were 15% cheaper on average.

During December, pork import volumes from Denmark, Belgium and Ireland rose by 10- 15% on a year earlier, while Germany delivered slightly more. By contrast, France, Spain and Holland delivered 10-15% less.

Less bacon & ham arrived in the UK from the three main suppliers in December 2014. On a year-on-year basis, imports from Holland, Denmark and Germany decreased by 3%, 5.5% and 11%, respectively.

Looking at 2014 as a whole, UK pigmeat exports showed an expansion of 5%, reaching 203,400t. Relative to total domestic pigmeat production, this equalled 23.5%; up marginally from 2013.

On the import side, annual volumes increased by 2% to a 3-year high of 614,300t.

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