UK pigmeat supplies are forecast to carry on rising by around 3% year-on-year, indicating that prices will remain “under pressure” unless market demand also increases, according to BPEX.
The release of the latest BPEX forecasts for UK pigmeat supplies show that the supply situation which has prevailed over the last year or so is set to continue, with domestic production expected to increase further and little change being projected for the balance of trade.
“Having been broadly stable in 2013, Defra’s June and December 2014 surveys suggested that the UK sow herd declined in 2014,” said BPEX. “However, this trend is not supported by production data and it seems more likely that the breeding herd has actually been more stable. The new forecasts, therefore, assume little change through 2014 and that this stability will continue in the near future.”
With productivity growth remaining the main driver of production levels and clean pig slaughterings forecast to carry on rising around 3% year-on-year, BPEX concludes that growth in pigmeat production for the remainder of 2015 is likely to be “similar” to the rise in clean pig slaughterings. Attention is also drawn to the continued importance of UK retailers relying heavily on UK products.
“Since mid-2013, the gap between UK and EU prices has remained well above 20p/kg,” said BPEX. “Despite this unprecedented situation, UK imports in 2014 were only slightly higher than the previous year, as pork buyers remained committed to sourcing UK pigmeat.
“If that situation doesn’t change, it seems unlikely that imports will rise significantly in 2015. UK export growth has slowed in recent months, not helped by the weakness of the euro against the pound. This looks set to remain a factor for the rest of 2015, with only modest export growth expected as a result.
“Taking all these factors into account, it is clear that pigmeat supplies are set to be plentiful for the rest of this year and beyond. This is likely to mean that pig prices will remain under pressure unless demand picks up to match the higher supply.”