September 21, 2020

UK pigmeat production dips; prices lower too but much higher than elsewhere in EU

The volume of pig meat leaving UK abattoirs for much of this year has been lower than year-ago levels, a contributory factor in the firmness of farmgate prices, according to the latest market commentary from Quality Meat Scotland (QMS).

June and July, however, registered year-on-year increases in production, leading to softening of farmgate prices.

Latest estimates for UK production showed volumes dipped again in the past two months below year-ago levels, said Stuart Ashworth, director of economics services at QMS.

"Despite this slight tightening in supplies, UK prices have continued to drift downwards through August and into September", Ashworth noted.

In contrast to the UK average farmgate prices, across Europe they are much lower than last year, and also much lower than the five-year average.

"With the UK price significantly higher than elsewhere in Europe, some of the fall in UK prices, despite lower production, may be accounted for by competitiveness of European prices", explained Ashworth.

Meanwhile, UK pigmeat producers are keeping a wary eye on the implications of the confirmation earlier this month of African swine fever (ASF) in Germany, Europe's largest pigmeat producer and second-largest exporter to markets outside the EU.

Ashworth said this could be very destabilising for the European and UK market.

"In the short-term, farmgate prices across Europe are likely to come under pressure until the inevitable consequences of Germany being prevented from exporting pig meat outside of the EU, become clearer", Ashworth said.