Prime pig farmgate prices reach two-year high

Farmgate prices for prime pigs currently stand at their highest level since December 2014, according to analysis by Quality Meat Scotland (QMS).

There have been week-on-week increases since a low point of March 2016, with pig prices rising by 28%, and currently standing at 12.5% higher than 12 months ago.

The rise has been attributed to Sterling weakness which has had a beneficial affect by making the UK average price lower than the European average price, when quoted in Euros, said Stuart Ashworth, QMS head of economics services.

This has meant that pork and pigmeat products imported from Europe have become more expensive, and therefore have not been a constraint on UK producer prices to the extent they have in the past, said Ashworth. Similarly UK exports of pigmeat have become more attractive without having to bid down domestic prices.

He added that its not just Sterling bolstering prices. Slaughter statistics show UK prime pig weekly slaughterings have changed little compared with the previous year, during the past quarter. However, because of increased carcase weights, the volume of meat produced has increased slightly.

Citing Kantar Worldpanel research, Ashworth said that domestic retail sales are having little positive effect on the sector with sales of pork products down on previous years.

Domestic retail sales are not driving farm gate pig prices at the moment, he said. What is driving prices is changed trade patterns and market balance in other parts of the world.

He believed that prices will remain stable for the foreseeable future. With Sterling expected to remain weak, and possibly weaken further in a febrile money market, falls in European pigmeat supplies and strong demand from China are likely to mean that UK pig prices will remain firm for some time.

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