Inconsistant EU price guides create unease among UK pig sector

THE BRITISH pig industry is alarmed that variations in national prices are not being re?ected in the returns received by producers, according to Tony Fowler, senior economic analyst for BPEX.

Fowler said the national reference prices, published weekly by the EU Commission, were not an ideal basis on which to base its analysis. "The reference price series may not re?ect quality differences - as represented by lean meat percentages - and deductions and bonuses.

"In terms of lean meat percentage, he said reference prices related to Grade E pigs, which were 55-59% lean meat content. However, the proportion of pigs falling into Grade E varied signi?cantly, accounting for 10% of British pigs but around 40% of German pigs. "If the average lean meat percentage in a country does not fall within the 55-59% band, then the reference price will not re?ect the average gross price the producer receives in that country," said Fowler.

"Where the average lean meat percentage actually falls within the grade E band, no further adjustment has been made. But where the lean meat percentage is outside the range, prices have been adjusted to a 57.5% equivalent (57.5% is the mid-point of Grade E). By far the most signi?cant adjustment for lean meat percentage is to prices in Italy, where the average lean meat percentage is only 47%," he added.

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