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The truth about pig prices and the “barbecue effect”

PW ReportersBy PW ReportersAugust 12, 20142 Mins Read
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Market fundamentals are far more important than the weather when it comes to pig prices, according to a fresh analysis of the so-called “barbecue effect” by BPEX.

To tackle the question of whether or not producers can expect a spell of “barbecue weather” to result in rising pig prices, BPEX recently compared average monthly temperatures against pig price movements. A 20-year market period, from 1993-2012, was selected to ensure the effects of other market conditions were completely removed.

“As with temperatures, pig prices follow a seasonal pattern,” said BPEX, “so we looked at whether prices moved more positively or more negatively than they normally would during each month. This could then be compared against temperatures to see how weather conditions influenced prices.”

During the selected 20-year period, it was found that in a total of 46 months temperatures were more than one degree warmer than the seasonal average. This included 20 spring and summer months (April – September).

“During these months, pig price movements were, on average, slightly less positive than normal, either rising more slowly or falling faster,” said BPEX.  “The difference wasn’t large at 0.4p/kg overall and 0.6p/kg in the spring/summer months.  However, this shows that hot weather, even in the barbecue season, doesn’t mean higher prices.”

The analysis also revealed a total of 45 months when temperatures were a degree or more colder than average, 24 of which were in the spring and summer.

“During these months, price movements were also slightly less positive than average,” said BPEX. “This suggests that ‘normal’ seasonal conditions are actually the most beneficial for pig prices. The effects are small, though, showing market fundamentals are far more important than the weather.”

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