Pig producers are going to have to wait a while for prices to firm says Quality Meat Scotland’s head of economics services, Stuart Ashworth.
Basing his view on an expectation that UK and European production will continue at higher levels for the remainder of 2015 than was the case last year, Mr Ashworth’s latest review of the pig sector in Scotland includes the point that prime pigmeat prices are almost 17% lower than at this point last year. As a result, he comments, producers are definitely “feeling the pinch” at present.
“History would tell Scottish prime pig producers to expect farmgate prices to rise seasonally to a high point at this time of year,” he said. “However, this year producers have seen little movement in prices over the first half of the year.”
There were a number of reasons for this.
“Some of the price pressure we are seeing at the moment will be due to an increase in UK production,” said Mr Ashworth (pictured above), adding that over the first half of the year prime pig slaughterings have increased by almost 4% with prime pork production up by 5%.
“Meanwhile Kantar retail market analysis suggests that demand for primary pork products is under pressure despite falls in retail prices.”
The fact that the UK is only around 60% self-sufficient in pigmeat products, however, does create an opportunity for domestic production to maintain volumes, at the expense of imported products.
The review also examines the case for a re-introduction by the European Commission (EC) of private storage aid (PSA) to support prices. Mr Ashworth’s conclusion, however, is that the EC won’t be keen on a re-run of PSA, largely due to believing that an increase in European production of 5% in the first half of the year is the main cause of falling prices.
As such, he adds, the EC is “reluctant to respond favourably to requests for aid for what they see as a supply-driven situation”.