Difficult situation in UK pig market to continue

Pig prices across the UK and the rest of Europe have been spiralling downhill, with key challenges likely to remain, delegates at the AHDB Outlook conference were informed.

During the pork and poultry breakout session at the event on 11 February, Stephen Howarth, market specialist manager, AHDB, said prices had fallen particularly sharply over the past six months.

The gap between the EU and GB pig price has been wide, and was "sustained" throughout 2014, he said, and while the cost of production in Europe may be lower than in Great Britain, prices have also been much lower there too.

Plentiful supply – the highest level since before the foot-and-mouth outbreak in 2001 – is to partly to blame, with the impact of currency fluctuations, namely a weak euro, pushing the GB pigmeat price down further.

Howarth said that, certainly in mainland Europe, there was some evidence to suggest that producers in countries such as Germany may be thinking about either leaving the industry or reducing the size of their herds due to poor profitability, which he said had the potential to result in some tightening of supplies in the EU towards the end of this year, and into next.

Despite higher prices for UK pork, British supermarkets’ commitment to British sourcing remains strong, said Howarth. The only decline in British sourced pigmeat products was for sausages, which saw a decline of around 2%; however, more than 80% of the sausages sourced contained British pigmeat.

Howarth said there had been a moderate amount of growth on the export side, "especially into China and Hong Kong", but with the Russian market closed to the EU, "there is a lot of pork that needs a new home".

He added that, in terms of exports from the UK, the Russian ban had not had a huge impact, and any losses had since been recovered.

Looking to the US, production is predicted to increase this year, from -2% to +5% as the industry recovers from the devastation caused by porcine epidemic diarrhoea virus (PEDv) in 2014.

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