December 9, 2003



UK Sow Market Knocked By Falling EU Pig Prices

Decreasing EU pig prices have knocked the cull sow market in UK, and in just 3 weeks, prices dropped by 8p/kg.


EU traders lowered their bids significantly last week (w/e December 5), and UK export abattoirs' prices also fell, to 57-60p/kg.


This represents a drop of up to £15 a sow and widens the gap between gilt replacement costs and cull sow returns.


In many cases gilts are now costing between £130 and £150 a head, compared with cull sow returns at less than £100/head.


Pig trading on December 5 reflected easing values throughout the EU and also tracked the downward trend of the UK Adjusted Euro-Spec Average, which lost 1.76p, to 105.38p/kg.


The Euro Deadweight Average Pig Price, which includes more cost-of-production stabilised contract pigs, only shed 0.86p to stand at 106.71p/kg.


Spot baconers were fetching 104-108p/kg, although choice lightweights - which normally attract a premium around Christmas - remained unchanged at 110-114p/kg.


Rising feed costs continue to be felt throughout the market, and are particularly affecting weaner prices.


These have fallen to significantly below cost of production levels - of £33-£35/head - with the Meat and Livestock Commission 30kg average at £32.78 ex-farm.


For those producers who do not have security of long-term feed contracts a 40% rise in compound feed prices is continuing to squeeze margins.


Unless finished pig returns recover early next year, further downsizing of the UK pig industry is expected.

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