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Demand-led pigmeat market shows changing seasonal patterns

PW ReportersBy PW ReportersDecember 22, 20152 Mins Read
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The UK pigmeat market has become much more demand-led in recent years with price trends moving away from previous seasonal patterns, according to AHDB Pork.

A new assessment of pricing seasonality by AHDB Pork reveals that since 2011 the traditional seasonal pattern that had been observed for many years has begun to diverge away from the usual trend.

“Throughout 2014 and for most of this year, prices have recorded a downward trend from the start of the year with only slight rises along the way,” said AHDB Pork. “In 2012 and 2013, the reverse was true, with prices rising for most of the year, although with periods of stability.”

Prior to this time, prices normally increased from the beginning of the year up until the summer, typically peaking in June or July, before falling from August until November, and then stabilising in December.

In looking at why patterns have changed and what the implications are for producers, AHDB Pork’s view is that the main factor that is now driving the seasonality of the market “must be demand”.

“Over recent years there has been added pressure on UK supermarkets and discount retailers to source 100% British fresh produce,” it said. “This has been driven by a greater consumer awareness of where their food comes from, allied to the higher welfare standards in the UK. With more retailers moving towards 100% British pork, there must be a higher proportion of British pigmeat going into fresh pork at retail.

“Fresh pork consumption and sales follow a seasonal trend themselves. During the colder months at the beginning of the year fresh pork consumption is at higher levels. Moving into the spring through until the end of summer fresh pigmeat consumption falls and then picks back up again in the winter, before falling again at Christmas.”

While noting that seasonality in the pig market is usually an important factor to consider for both producers and processors when seeking to optimise margins, AHDB Pork’s conclusion is that, at least for the time being, seasonality is looking to be less of an influencing factor on the GB pig market than in the past.

It also warns, however, in looking forward to 2016, that “we should not necessarily expect prices to pick up in the spring, as was the case in previous years, if the current market situation continues”.

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