British kill remains low while production rising in other significant pig rearing states
UK at the top of price league so why are suppliers angry?
Gossip in the British pig farming community suggests simmering resentment will soon turn into active protests against the allegedly "unfair" prices paid by the biggest processors and their multiple customers.
From the buyers' perspective this looks puzzling, as prices for most good quality pigs in Britain are between about 20% and 40% higher than in the Continental and Irish markets responsible for most imported supply.
The differentials are wider than can be explained by any over-valuation of sterling.
Prices have, of course, softened recently in line with the usual trend after about mid December, but as The Grocer went to press the big slaughterers were still reportedly paying about 98p per kg for baconers.
Some processors were said to be paying well over 110p for light porkers and cutters. At a time when the Danes and French reckon their markets must head south from 90p and Dutch producers would be grateful for 80p, the British domestic trade is hard to comprehend.
However it almost makes sense if the contrasting kill trends here and on the Continent are borne in mind. The UK industry started last year with its average price near the top of the EU table, partly because clean pig production here had tumbled about 15% following severe contraction of the breeding herd due to the financial crisis afflicting the sector in '98-'99.
Of course the FMD disaster, following the Continental BSE scare, then sent UK and other EU prices hurtling off in all directions.
But the recent return of the UK to top of the price league is logical as the kill here remains low while production has been rising (or at least not falling as earlier predicted) in other significant pig rearing states.
Yet the current UK price is no higher than 12 months ago despite the small slaughter numbers. For buyers, this appears to signal no more than a brief price increase is possible, because increasing total EU production will be a stronger market influence than any further domestic supply reduction.
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