Market forecasts regarding short-term pig production across Europe suggests “little respite for producers” says Quality Meat Scotland’s (QMS), head of economics services, Stuart Ashworth.
Writing is his quarterly review of the pigmeat sector, he warned that production in the second half of 2015 is expected to be 1.5-2% higher than last year, a fact that will continue to influence prices.
“The fallout from Russian restrictions on trade and the effects of African Swine Fever in Eastern Europe continue to weigh heavy on the market,” said Mr Ashworth (pictured above), adding that European producer prices collapsed in late September last year and continued to slide until mid-January this year.
“In reality, though, Scottish and UK producers are being squeezed harder than their European colleagues because in Sterling terms domestic producers are seeing prices around 15% lower than last year.
“With animal feed prices having fallen more slowly, profit margins in the sector have clearly come under pressure both in Scotland and across Europe.”
He does take a glimmer of hope, however, from the latest EU move concerning the second private storage aid (PSA) programme of the year, but only a glimmer.
Commenting that, in contrast to the first scheme, the newly announced PSA will include lard, he said: “By encouraging processors to store product, the hope is that producer prices will recover some lost ground.”