August 24, 2010

UK pork prices slip on-year amid feed inflation concerns

An agriculture body Monday (Aug 23) dismissed suggestions that the cost of UK meat is set to soar due to rising expenditure for fodder after data showed livestock prices remain below last year's average.

The average price per kilogramme of pork in the year-to-date is GBP1.423, down 2.3% compared with 2009, data from the Agriculture and Horticulture Development Board (AHDB) showed. Prices have actually fallen in recent weeks, and are currently GBP1.416/kg compared with GBP1.446 at the beginning of July, although they are still above the four-year average.

The figures counter comments by analysts that meat will become more expensive this year due to a surge in the cost of livestock feed ingredients. Wheat prices have rocketed in recent weeks to hit two-year highs earlier this month after Russia banned grain exports for the rest of the year.

Prices for frozen pork bellies as quoted on the Chicago exchange have increased by nearly three and half times so far this year. Meanwhile, prices for fresh pork bellies have risen to a record high, up 53% on the same time last year.

Analysts attributed the rise to the increase in the cost of feed, which accounts for around 60% of total expenditure regarding meat, according to reports. However, because UK meat prices are not quoted on exchanges, they will be less affected by speculative influences, an AHDB analyst said.