Scottish pig prices reach three-year high

Pig prices in Scotland have reached their highest level since mid-2014, and are 38% higher than this time last year. 

Analysis from Quality Meat Scotland (QMS) has shown that although prices are 38% up year-on-year, this drops to 21% when quoted in euros, following exchange rates.

Stuart Ashworth, head of economics services for QMS, noted that there has been a 33% year-on-year increase in average pig prices across Europe. It was highlighted that the basic supply of pigmeat is slightly lower than last year across the UK and wider Europe.

“Defra [Department for Environment Food and Rural Affairs] slaughter data show prime pig slaughtering to have fallen about 2.5% year-on-year during March and to have tightened further in April, although slightly higher carcase weights mean the decline in pork production is not so great,” he explained.

Prices are being supported by lower production levels, although Ashworth did point out that the UK December census showed the number of young pigs on-farm grew, representing some growth in UK production as the year develops.

He said: “In contrast, consolidated December census data from across Europe shows a breeding herd population slightly down for the second year in a row. Indeed, pigmeat production in the European Union is forecast to be 1% lower than last year throughout 2017.

“However, while the EU is expected to have a tighter supply throughout the year, it remains about 120% self-sufficient and this explains why the EU is the world’s largest exporter of pigmeat.”

Ashworth added that global demand is helping to strengthen pig prices. “Globally, there has been significant growth in international trade and particularly in trade in the Asian region,” he said. “European Union trade data shows a growth in exports to China during 2016 of 63% and growth continuing into 2017, with January and February exports to China from the EU up 13%.”

Shipments to Japan and South Korea have experience growth in the last 18 months, which has balanced out the exclusion of the EU from the Russian market.

“The UK has also benefited from this growth in Asian demand, which has seen exports grow by one third to make up one quarter of all UK pigmeat exports. This increased Chinese trade is in frozen product, which has helped to run down frozen stocks, tightening supply further.”

QMS predicted that China, Japan and South Korea would import more pigmeat in 2017 than they did last year, although there was expected to be an increase in pig production from the USA and Brazil, which could cool pigmeat prices. In fact, growth in US production has already resulted in the cooling of US farmgate pig prices.

While data showed that, closer to home, high street sales of pork have dropped slightly, Ashworth claimed the overall use of pigmeat was actually increasing. “In the final quarter of 2016 the total volume of pigmeat available to the UK market increased by 6.5% and while some of this may have resulted in increased stocks, it does suggest greater use of pigmeat in delicatessen and processed products, as well as out-of-home eating,” he observed.

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