A new analysis of the January pigmeat market by Quality Meat Scotland (QMS) has confirmed that producers throughout the UK are set for a “challenging” period.
Commenting that farmgate pig prices traded around 16% lower in January than a year ago, QMS economics analyst, Iain Macdonald, said that several factors had influenced current values with a few more set to “play out” in 2015.
“At a UK level, 2014 was the fifth consecutive year of increased pig slaughterings and the number of pigs slaughtered was at its highest level since 2002,” he said. “Once you factor in heavier carcase weights, at 862,100 tonnes, UK pigmeat production was at its highest level of the century. At the start of this year, in fact, weekly abattoir throughput is estimated to be running 7% ahead of last year.”
This increased supply has come despite UK census data reporting a contracting breeding herd. In June 2014, sow numbers were down 3.5% year-on-year at 406,000 head, which, compared with 2002, amounts to 28% fewer sows.
“These figures show how significant the improvement in pig sector productivity has been,” said Mr Macdonald. “Years of investment in improving herd health and genetics have seen a huge leap forwards.
While also looking at the beneficial movement of feed costs, for pig producers, the impact of the falling Euro on imports, or potential imports, and the continuing export “lock-out” from Russia, he concluded that the industry is facing a “challenging market” going forward with much depending on how UK food manufacturers and retailers react to the growing EU/UK gap in pigmeat prices.