GB pig prices hit by “weak euro” impact

The continuing weakness of the euro against sterling is costing GB pig producers in the region of 15-20p/kg according to a new analysis by AHDB Pork, fousing on the impact of exchange rates on the GB pig price.

Although the increased supply of pigmeat in both the EU and UK would have meant prices would still have fallen without any “help” from the exchange rate factor, AHDB Pork said the current price fall would have been smaller.

“GB prices in recent months might have been around 15-20p higher than they are,” said AHDB Pork in the first of two articles on the subject.

The analysis also suggests that “with the euro apparently unlikely to strengthen against the pound in the near future, it will be difficult for GB prices to regain lost ground, especially if EU pig prices stay low”.

Charting the movement of euro/sterling rates in recent years, AHDB Pork pointed out that, having been worth 87p in July 2013, the euro has recently been valued at just 70p, a fluctuation in value which has definitely had an impact of GB pig prices.

“Historic trends confirm that there is a close relationship between pig prices and the exchange rate,” it said, adding that over 60% of the variation in pig prices can be explained by the exchange rate alone.

“On average, for every 1p decrease in the value of the euro, the pig price falls between 2p and 3p. Therefore, a fall of 17p, such as the one seen over the last two years, might be expected to coincide with a fall of around 40p in the pig price. The actual fall over that period has been of about that size, confirming that the exchange rate probably had a significant influence on the price drop.”

See full AHDB Pork analysis

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