February 18, 2015

Challenges remain for EU, UK pig markets, expert say

Pig prices across the United Kingdom and the rest of Europe have been spiralling downhill, with key challenges likely to remain, Stephen Howarth, market specialist manager, AHDB, told delegates at the AHDB Outlook conference.

The gap between EU and UK pig prices have been wide, and was "sustained" throughout 2014, he said, and while the cost of production in Europe may be lower than in Great Britain, prices have also been much lower there too.

According to him, record supply levels since the 2001 foot-and-mouth disease outbreak is partly to blame, with the impact of a weak euro further pushing down UK pig meat prices.

Howarth said that, certainly in mainland Europe, there was some evidence to suggest that producers in countries such as Germany may be thinking about either leaving the industry or reducing the size of their herds due to poor profitability, which he said had the potential to result in some tightening of supplies in the EU towards the end of this year, and into the next.

Despite higher prices for UK pork, British supermarkets' commitment to British sourcing remains strong, said Howarth. The only decline in British-sourced pig meat products was for sausages, which saw a dip of about 2%. However, more than 80% of the sausages sourced still contained British pig meat.

Howarth said there had been a moderate amount of growth on the export side, "especially into China and Hong Kong", but with the Russian market closed to the EU, "there is a lot of pork that needs a new home".

He added that, in terms of exports from the UK, the Russian ban had not had a huge impact, and any losses had since been recovered.