QMS points to ‘cooling’ pig prices
Published:  26 August, 2014

Quality Meat Scotland (QMS) has highlighted the “cooling” of pig prices, suggesting there are more pigs on the market.

Farmgate pig prices have fallen by over 6p/kg from a seasonal peak of 164.5p/kg dwt at the beginning of June, 9.5p/kg (5.5%) behind last year’s levels, the Scottish meat body reported. Iain Macdonald, senior economics analyst at QMS, explained: “One likely contributor to the cooling of prices has been strong domestic production.  

“Defra slaughter data for UK abattoirs showed year-on-year increases in the prime pig kill of 2.5% in May, 3.5% in June and then 0.5% in July, with the weekly average kill rising each month.  

“In Scotland, slaughterings rose by 5% in July. Furthermore, carcase weights have been heavier this year, averaging around 80kg at UK abattoirs between May and July 2014 compared with 78kg 12 months before.”

Higher throughput and heavier weights pushed prime pigmeat production up by 5% year-on-year in May, 6% in June and 2% in July and has resulted in more pigs available on the market, meaning overall pigmeat production was up by 3,400t (5.5%) year-on-year at 64,500t in June, and then 2% higher in July, Macdonald reported.

However, Macdonald noted that, as the UK exports almost a quarter of its pigmeat, a stronger pound was also having an impact on pig prices. The pound has strengthened by around 6.5% against the euro year-on-year and this has forced exporters to lower sterling prices considerably to hold down euro prices and expand export volumes, QMS said.  

“In June, the average value per tonne of pork shipped to the EU was marginally higher in euro terms than 12 months before but returned 5% less sterling, commented Macdonald.

However, Macdonald said the low producer prices could be being offset because of changes in feed costs, which showed a 45% decline for wheat and barley prices and a 12% decline for soya meal.