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QMS probes the complexity of early year pig prices

PW ReportersBy PW ReportersFebruary 13, 20172 Mins Read
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Five weeks of “marginal” price decline have seen saw pig values ease back from their 26-month high of 151.9p/kg dwt at the end 2016, to below the 150p/kg mark at the beginning of February, according to the latest analysis by Quality Meat Scotland (QMS).

Despite the reducing price trend, however, producers were still paid an average of 32% more per kilo in early February this year than was the case 12 months ago.

A closer look at what has been happening, however, shows how complex the early year market has become.

“Traditionally, farmgate pig prices have cooled in the early part of the year and a commonly held belief is that this can be explained by consumers cutting back on spending and meat consumption after the excesses of the festive period,” said QMS Senior Economics Analyst, Iain MacDonald (pictured above). “However, Kantar Worldpanel data suggests the opposite.

“Between 2012 and 2016, the average pork sales volume during the early January to early February period was 16% higher than in the four-week period ending just after New Year. Furthermore, the four weeks to early February was the annual peak period for pork sales in 2014, 2015 and 2016.

“Perhaps then, pork is a beneficiary of a post-Christmas change in consumer spending patterns, with many cost-conscious households switching towards cheaper proteins.”

The QMS analysis also suggests other factors are at play in the early year market, including a possible “lag between slaughtering and retail sales” over the Christmas/New Year period and the impact of differing slaughter carcase weights during December and January, due to prime pigs tending to be slaughtered at slightly younger ages and lighter weights in December, due to the concentration of slaughtering in the early part of the month before the holiday season disrupts production.

See full QMS analysis

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