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Positive price support outlook for UK pigmeat

PW ReportersBy PW ReportersJuly 27, 20162 Mins Read
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A tightening of pigmeat supplies in the UK over the coming months is forecast in AHDB Pork’s latest outlook report, suggesting that this “should help” to support prices on the domestic market.

“Depending how consumers respond to the economic uncertainty post-referendum, prices could continue to strengthen in the second half of the year, as they have done in the second quarter of 2016,” said AHDB Pork.

Although domestic production growth is expected to “draw back” in the second half of this year, output will still be ahead of 2015 levels. Despite this, a shift in the balance of trade, with imports down against increasing exports, the forecast is for a reduction in “available supplies” over the coming months.

“This should provide the market with much needed stability, after two years of tough times, and may result in the pig price continuing to rise,” said AHDB Pork.

“Decreasing imports, coupled with an increase in exports, are forecast to offset any rise in (domestic) production. It is therefore projected that supplies available for consumption on the domestic market will be down on last year’s levels. In fact, they will return to a similar level as in 2014.”

In addition, with the pound expected to remain weak, further reductions in imports and growth in exports are expected for early 2017 and, potentially, for the year as a whole.

The outlook report also notes that the level of productivity growth within the UK remains the key driver of future production increases.

“Based on the December breeding herd figure, productivity has dipped in recent months,” said AHDB Pork. “While some decline may have happened, given reports of disease issues, this provides evidence to support the view that the December breeding herd figure may be too high. Despite this, productivity remains close to the long-term trend.

“The latest InterPIG results show that there is still room for improvement in productivity rates, as the UK lags behind the major producing EU member states. Furthermore, increased investment in genetics, training and research will look to further improve this figure. Therefore, productivity is forecast to return to and stay on the long-term trend for the remainder of the forecast period. It is forecast therefore that clean pig slaughterings will continue to rise over the next year, albeit at a slightly slower rate.”

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