European pig prices rise as supply tightens
Stuart Ashworth, head of economics services at QMS, said trade data suggested that exports of UK pork were more than 20% up on last year, with sales growth to EU and Asia. Ashworth said higher prices in Europe had been helped by a tighter supply of pork.
“The December census showed a European sow population decline of 4% and this is leading to a tighter supply of prime pigs,” he added.
“In May, the European Union slaughtered 2% fewer pigs than it did in the same month last year. The current forecast is that pigmeat production across Europe will be 4% lower over the second half of 2013 than it was last year.”
Meanwhile, Ashworth pointed out that international politics were also helping the European pig market and said Russia’s restrictions on pigmeat imports from the US, Canada and Brazil – over concerns of growth promoters – had created demand for European pigmeat in Russia.
“Notwithstanding the speed with which the politics of international trade can change, the continued tightness of European pig supplies are likely to underpin prices for some time yet,” he added.
However, Ashworth noted that producer margins and confidence was still “fragile”, despite price increases. He said feed was the largest input cost and the price of feed was still very high, with hopes there would be a fall in feed prices in the future.
He added: “Although the December census showed an increase in gilts intended for breeding, the combination of higher sow slaughterings in the first half of this year and the 2% decrease in sows reported in December do not point towards any material increase in the sow herd, and hence future production, unless the herd has become more productive.”
