More signs EU output decline will be modest
Purchasers rather than producers are being watched closely by pigmeat analysts across the EU as pundits search for credible price signals.
The Irish Food Board offers its exporters encouragement with reports of strong demand for pork in Britain, Germany, France and Italy, while MLC economists suggest "it may be that the improved domestic demand is helping to prop up the UK price".
Up to a point this new emphasis on consumer demand as a market driver is justified, as supermarket promotions have certainly provided unexpected impetus in the French retail lamb trade this year, and to some extent in the British beef market.
However, analysts are certainly uneasy with the conflicting data from the supply end and are seeking clues elsewhere. Latest French pig census results are an example of the statistical confusion.
The figures for stock on farms in May show there had been no decisive drop in the number of pigs in the pipeline, despite the earlier very deep depression in the market, and this output resilience explains the French slaughter rate already reported as surprisingly high in early summer.
The census results do show there was herd contraction in the year to May, but at only about 2% it was nowhere near enough to trigger a sharply price boosting supply squeeze.
As France has a pig industry about twice the size of the UK's, its lack of a clear output trend makes the low slaughter rate in this country almost meaningless as a forward price indicator.
- See Bacon, p22
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