Will cheap grain mean cheap pork? Meat traders who usually interpret news of EU export subsidy cuts as a warning of high international prices likely to inflate their domestic raw material supply costs may be pleasantly surprised by developments in the UK and continental cereal sectors. Grain is being exported from Europe without subsidies from Brussels. Good crops and the weak euro have together made EU cereals competitive on the world market, even against rival suppliers in North America. Therefore cheap feedgrain for pigs (and for cattle) is available here and on the continent. At the moment wheat, the most heavily used pig feedgrain in this country, can be bought in the spot market for little more than £60 per tonne ­ half the price militant farmers claim it is worth. Although the market has been soft for months, the new factor is grain traders' belief Brussels wants to keep it at this level, avoiding export subsidies for political and budgetary reasons. The implied message is EU pig production will be cheaper than expected, as feed accounts for 80% of variable costs. This in turn could explain the puzzling resilience of breeding stock numbers and pig slaughterings on the continent, where latest reports are again of surprisingly heavy supply and wobbly prices in major markets. On the other hand, new farm census results from several member states including Germany hint at a sharp rundown in breeding stock numbers possible under way. {{MEAT }}

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