UK pig meat price tumbles 17 per cent year on year

While cattle and sheep prices have been enjoying their day in the sun recently, the same can’t be said for those working in the UK pig sector.

And despite farm gate prices for pig meat picking up over the first quarter of 2021, both UK and EU prices remain well below last year’s levels.

According to the latest market commentary from Quality Meat Scotland (QMS), prices for the EU and UK remain 13 per cent and 17 per cent lower than a year ago.

While average prices in the USA and Canada have climbed by 35 per cent since the beginning of February, QMS director of economics, Stuart Ashworth said that recovery in the GB had been a ‘more modest’ two per cent - although they remained higher than the EU average.

But he warned that while recent rises in farm gate prices were welcome, pig producers were also seeing feed prices climb - an input which accounted for over three-quarters of the cost of producing pig meat.

“With cereals and oilseed meal prices some 15-20 per cent higher than 12 months ago, the fact that farm gate prices are lower than this time last year clearly indicates lower margins for pig meat producers in Scotland,” said Ashworth.

He said that prices in both Europe and America were being helped by continued firm demand from China with international trade heavily influenced by the presence of African Swine Fever (ASF) in national pig herds.

“It had been thought that China had ASF under control but recent reports from the country indicate that ASF is still circulating and there has been some regional increases in incidence.”

He said that as a consequence, China was expected to continue as a major player in international pig meat trade throughout 2021.

Exports to China during 2020 had risen by 45 per cent across Europe, although growth was a more modest 16 per cent during January 2021, but UK trade data indicated that although the UK had also benefited from increased trade with China in 2020 exports to the east had been less successful during January 2021.

“The reasons for this decline in UK trade with China are complex but include China’s removal of export approval from some processing sites, including a major site in Scotland, because of concerns over the presence of Covid-19 among the staff of these sites,” said Ashworth.

“Not only do these Covid implications reduce market opportunities internationally for these sites they have also led to limited slaughter capacity, resulting in pigs being held back on farms leading to these pigs falling out of premium specifications and suffering price penalties.”

The recovery of export approval was proving time consuming - and geopolitical tensions over China’s treatment of the Uighur communities was, Ashworth said, an added hindrance.

Meanwhile, the December census results for Scotland and England indicated little change in pig numbers on farms compared to 2019, leading Ashworth to surmise that while there might be some modest growth in the months ahead, matching last year’s prices in the medium term could be an overly ambitious target.