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QMS (Quality Meat Scotland)


31 January 2012

QMS Pig Market Report - January 2012QMS Pig Market Report - January 2012

Having bucked their historical trend by rising during the final quarter of 2011, pig prices gave back these gains, and more, in the first three weeks of 2012.
QMS - Quality Meat Scotland

Prices and Supplies

Nevertheless, ex-farm prices are still nearly 5% above year-earlier levels.

Prices have held a year-on-year premium in recent months despite an expansion of domestic production. On the back on a 6% increase in November throughputs, average weekly kill figures for December show that UK abattoirs slaughtered 5% more prime pigs than in the same month of the previous year. With the June census showing just a 2% gain in the breeding herd, therefore, by implication, greater production has been fuelled by productivity gains.

A sign of renewed confidence in the pig sector has been borne out in the market for weaners. The combination of lower input costs and better prices for finished pigs has resulted in a turnaround in prospects. Consequently, weaner prices have increased steadily since October and are now 12% ahead of their 2011 low.

As a result of the weakening Euro, cull sow prices have stabilised recently since their meat is principally for export. Nevertheless, strong demand on the continent and competition between buyers has acted as a buffer, and prices are still 32% higher than one year ago.

Though input costs are well below year earlier levels, grain prices have drifted higher in recent weeks while oil prices have remained stubbornly high as the weakening of Sterling against the US Dollar has pushed commodity prices higher in Sterling terms.

Currency movements against the Euro have also impacted negatively on producers with a weaker Euro leading to an increased availability of cheap pigmeat imports to compete against. With EU prices falling by 10% since the beginning of December, the gap between the UK and EU averages for grade E pigs has widened to 17p/kg (13.5%), a 50-week high.

In November, UK pork exports failed to beat year earlier volumes for the first time since January 2011. However, over the January-to-November period shipments were up 10.5% on the same period of 2010.

Imported pigmeat volumes were slightly higher than year-earlier levels for the first time in three months in November. Imports in the eleven months to November were 3% higher than in the same period the year before.


January 2012

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