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Improving UK economy is the best hope for 2015 pig sector prospects

PW ReportersBy PW ReportersJanuary 12, 20152 Mins Read
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The next 12 months could easily become another year that pig producers will want to forget, following on from 2014’s steady decline in pigmeat prices, according to BPEX.

Looking back at 2014 and forward to 2015, BPEX is more downbeat than upbeat about the year ahead, with the best hope for progress resting in the UK economy improving, enabling consumers to start “loosening the purse strings”.

 “The coming year could again be a tough one for producers,” said BPEX. “For example, barring a major disease issue, UK pigmeat production is likely to increase again; latest AHDB/BPEX forecasts suggest a 2% rise in 2015.

“There is also little prospect that the Russian ban will end, at least in the first half of the year. This means that the EU market seems set to remain depressed for much of 2015, especially as economic forecasts don’t look very positive. Indeed, the recovery of global output following PEDv may mean a more challenging export environment, making things even tougher for the EU industry this year.”

The only hint of positive hope on this front is attached to indications that there has already been an increase in sow culling on the continent, which could result in some tightening of supplies towards the end of the year, a move which could “eventually start to push prices higher”.

“Other things could change too, either for better or worse,” continued BPEX. “Eventually, the gap between UK and EU prices, which has been above 30p/kg since September, may prove too much for retail buyers to resist. If this means a sharper than expected rise in imports, it would pull UK prices down towards those elsewhere in the EU. Certainly, it seems unlikely that imports will fall very far while the gap is so high, even with more UK pork available.

“On the flip side, any recovery in consumer demand would support prices. With the UK economy improving and wages now rising faster than inflation, purse strings may start to loosen. How quickly this translates into retail meat sales remains to be seen and the relative price of pork and other meats will influence which benefit most.”

Access full BPEX 2014/2015 assessment 

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