Pig Prices Move Up and Up and Up (August 2008)

By Chris Harris, Senior Editor, ThePigSite. Our snapshot of the ongoing global pig industry trends as reported in August 2008 Whole Hog Brief. To read the full detailed analysis including all the commentary and graphical data, subscribe to the publication.
calendar icon 5 August 2008
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The global pig price cycle has turned up as the Whole Hog has been predicting over recent months.

Record prices are being seen in many of the main pork producing countries, produced by low slaughterings, low stocks and large export volumes as well as a high seasonal demand for meat.

The Whole Hog says that the average producer price rose by 5.5 per cent over the month to the last week of July and more than 15 per cent year on year to €172.68 per kg.

The highest price was seen in Poland where it rose to €193.57 - up by m ore than 12 per cent on June.

The Whole Hog's global price index has been moving up since early May and it says there has been a steady weekly price gain since then.

European, Canadian and US prices have all been moving in the same direction.

The Whole Hog says that for those producers, who planned ahead the rest of 2008 looks as though prices will be positive.

It says it could last for 12 months before prices start to turn down again.

However, it says that while producers will react to rising feed and energy costs consumers will be reacting to changes in incomes and prospects of inflation.

For the European producer, the latest figures mark an even longer upturn - from March and whole the Polish market saw the greatest price shift it was closely followed by other eastern European countries and Germany. The German, Czech and Hungarian prices are all around the €183 mark - 20 per cent higher than a year ago.

The Whole Hog says that with summer and the barbecue season, meat demand is expected to increase.

Grain Harvest Optimism

While pig prices are high, the Whole Hog reports that the grain harvest this year is expected to increase by 55 million tonnes worldwide.

According to the USDA figures, wheat will reach 664.24 million tonnes, which is about 54 million tonnes more than in 2007.

The Ukrainian harvest is expected to be 11 million tonnes more than last year and the country is expected to be exporting considerably more this year.

There is also optimism about EU crops as well as the harvests in Australia and Canada.

Fall in Danish Herd

The latest figures from Denmark, as reported in the Whole Hog show a fall in the breeding herd and slaughter pig numbers are falling.

At the beginning of July, the numbers of Danish pigs were 1.2352 million. Although this was 1.3 per cent up on the April figure, it was 9.5 per cent down on July 2007.

The breeding herd numbers were 810,000 - also 9.5 per cent down on 2007.

Danish live pig exports, however, are rising - 33.5 per cent up for the first quarter of the year compared to the same period in 2007.

North American Export Climb

Canadian pork exports rose by 6.2 per cent from January to May this year, compared to 2007.

The exports rose to 446,502 tonnes despite a temporary ban on Canadian pork by Russia.

The largest export markets were the US and Japan.

Meanwhile, US pork exports climb higher and higher. Total exports increased by 61.9 per cent year on year to May - or by 300,000 tonnes.

In May, pork cuts and variety meat exports equalled the record 188, 413 tonnes - a rise of 11.5 per cent on the previous month. The main markets, according to the Whole Hog, were Japan and Mexico although China and Hong Kong saw rises in imports of US pork.

Australian pork exports increased in volume according to the Australian Bureau of Statistics figures for April, but fell in value.

The largest increase in exports was to New Zealand - nearly 16 per cent higher in April than a year ago. The other main markets, the Whole Hog reports were to Singapore and Japan.

Japanese pork imports increase in April and were at their highest level since July 2005.

The Whole Hog says that during April, Japan imported 72,811 tonnes of pork - 8.6 per cent more than in March and 24 per cent more than a year before.

South Korea also saw a rise in imports in June - 1.4 per cent more than the previous month and 13.7 per cent higher than a year ago.

While imports from the US rose, they fell from Canada and Chile, although year on year these figures were up.

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