Export factor causes unease
Pig prices in the UK were falling a fortnight before Christmas, a downturn predictable in normal circumstances as most processors would have satisfied their carcase needs by mid month.
Yet the deadweight average value estimated by MLC was about 4% lower in the week ended December 15 than a year earlier, despite the kill being well under the already depressed level of late 2000.
The implication is weaker underlying demand for pigs.
UK consumption of pork has been relatively stable in recent years. Import trade fluctuations were also undramatic until FMD, just a gentle uptrend evident during the preceding three years. In contrast, domestic production and exports have tended to move more sharply, usually changing direction together.
The difference is due to a surprisingly radical alteration of the British pig industry's customer profile over the past decade. Bacon has not changed much in total volume (home production, imports and consumption all having increased 10% since the early 1990s), but pork has become an export-led sector.
The doubling of overseas sales volume during the past decade was mostly caused by increased sales of cuts from clean pigs.
This helps account for the current unease among major pig abattoir operators and non-slaughtering further processors. Not only are their advisers unsure when or even whether breeding herd expansion will begin again, they cannot assess confidently the strength of likely competition from buyers on the continent who had become accustomed to UK product before FMD halted exports but might have plenty of supply available from other EU producers already building up pig numbers.
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