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AHDB Pig Market Weekly

30 August 2013

AHDB Pig Market Weekly - 29 August 2013AHDB Pig Market Weekly - 29 August 2013

With good weather boosting demand across Europe and export markets performing better than earlier in the year, EU pig prices have risen steadily since early June.


EU pig prices still rising

As well as the demand factors, tightening supplies also contributed to the increase, particularly in more recent weeks. Pig numbers were reportedly lower, partly the result of the impact of the new welfare regulations which came into force at the start of the year. In addition, the hot weather meant that pigs were slower coming to market and that weights were lower, exacerbating the shortage of supplies. Despite some easing of demand during the holiday period, prices continued to rise in August, albeit at a slower rate, reaching €188.56 per 100kg by week ended 18 August. This was less than €4 below last autumn’s peak.

Prices have risen across virtually all Member States. The sharpest increase was in Italy, where the average has risen by more than €40 euros since mid-May (and by €9 in the latest four weeks), while in Spain the price topped €200 for the first time since 2001. Prices in most other major producers also rose by between five and ten euros over the four weeks to 18 August. Prices remained higher than a year earlier in most member states, although Italian and Danish prices were at a similar level to last year. With the UK reference price increasing only marginally in euro terms, the premium over EU prices narrowed from over €24 per 100kg in mid-May to under €3 in August.

Irish pork exports lower, imports higher

Irish pork exports weakened by 4% between January and June this year, compared with the same period in 2012. This is likely a result of lower availability as production between January and June was slightly down on the previous year, given the sharp decline recorded in the Irish breeding herd in the December census. Exports during the six month period totalled 62,400 tonnes and just over 60% was shipped to the EU. The UK maintained its position as the primary buyer, with an increase of 5%, while Germany bought 10% more Irish pig meat. Amongst non-EU markets, exports to China and Russia increased by 4% and 29% respectively. However, these increases were offset by lower shipments to smaller buyers including the US and Japan. Despite lower exports, a 9% rise in the unit price meant that the value of shipments totalled €146.4m, up 5% on the year.

At 24,600 tonnes, pork imports into Ireland increased by 47% in the first half of the year compared with 2012. Imports recorded from the UK more than doubled, although this conflicts with UK trade statistics which show little change in shipments (albeit at a higher level). This higher level of imports will have increased supplies available on the domestic market, despite the lower production. As a result, Irish pig prices have declined by over €10 per kg since the turn of the year and they haven’t experienced the rises seen elsewhere in Europe in recent weeks.

UK pig prices

For the week ended 24 August, the EU-spec DAPP edged down to 167.72p per kg. This was 0.14p down on the week, while the annual difference remained at 17p per kg. Normally, prices would be easing at this time of the year, as supplies increase more rapidly than demand. However, the typical pattern is less apparent this year as pigs have been short and EU prices have been increasing. During the week, throughputs were estimated at 163,400 head. This was almost the same as the equivalent week in 2012, indicating tight supplies continue. Carcase weights for the week ended 24 August rose to an average of 79.33kg, a week-on-week change of almost half a kilo. This may be a sign of the start of the seasonal increase, which has been delayed this year. However, there was a substantial increase compared with a year earlier, as pigs were over 1.6kg heavier.

The weaner price was unchanged for the week ending 31 August, at £53.66 head. This may partly reflect the sluggish finished pig market, while producers remain hesitant to pay extra despite better prospects for feed prices. However, producers are getting a better return, with prices £15 higher compared with the same week last year.

Cull sow prices continued to strengthen, at 121.44p per kg for the week ended 17 August. This was almost two pence up on the week and the highest since late April last year. Movements in the EU markets continued to impact the GB cull sow market, with tight pig supplies leading to a sustained upward trend in prices.

UK slaughterings marginally up on the year

Latest figures published by DEFRA, indicate that UK pig supplies in July were only marginally higher compared with the same month in 2012. Slaughterings in July totalled 964,500 head which meant that the year-to-date total was almost at the same level as the first seven months in 2012. The number of pigs slaughtered in England and Wales continued to rise, while Scottish throughputs were considerably lower. In the same month, slaughterings in Northern Ireland came down by 2% on the year.

At 78.29kg, the average carcase weight in July was over a kilo heavier than 2012 levels and the highest July figure on record. Last year, higher feed prices meant that producers marketed pigs slightly earlier, reducing weights. However, the situation is somewhat different this year and producers were able to finish pigs to a normal weight and even add a little extra. As a result, pig meat production for the month totalled 79,000 tonnes. This was nearly 2% above the level a year earlier. The cumulative total for the first seven months of 2013 reached 487,000 tonnes, up 1% on the year.

Feed market update

The Nov-13 London feed wheat futures price closed at £161.20/t on Tuesday (27 August), up by £7.20 on a week earlier and the first daily close above £160 in almost a month. UK prices are following US maize futures, which moved higher due to dry weather in the Corn Belt. Speculators in US markets have been buying back short positions, which has placed upward pressure on prices, although fundamental factors have barely changed and the US crop is still expected to be somewhat greater than last year. In the UK, Friday’s delivered cereals prices showed East Anglia barley at a £13.50/t discount to wheat. Barley prices are being supported by export demand, although the bulk of the spring barley harvest is yet to start. This could put downward pressure on prices, as it is where the additional barley production in 2013 is set to come from.

The Hi-pro any origin soyameal (ex-store East coast) price as at Friday (16 August) was £402/t for August delivery, down £2 on the week but the rape meal price (ex-mill Erith) increased by £12 from the previous week to £181/t. Soyabean futures have gained support from the dryness in the US, with Nov-13 futures recently trading close to contract highs.

To read more about the latest developments in the feed market click here.

AHDB/HGCA Grain Market Outlook Conference

The AHDB/HGCA Grain Market Outlook Conference will be held on 15 October this year, titled 'Redefining resilience: How equipped is the industry to manage future change?' Attendees at this year’s conference will hear from four experts, on the 2013 crop, the inside view on Chinese grain and oilseed markets and thoughts on the long term robustness of the UK arable sector.

To view the agenda and book a place, please click here.

August Pig Market Trends out now

The August edition of Pig Market Trends (PMT) was published on Tuesday. As well as the usual coverage of producer prices, slaughterings and production, trade, retail sales and prices, costs of production and other industry news, this month’s edition includes an update on this year’s Northern Hemisphere harvest.

Key messages this month include:

  • DAPP and weaner prices level off in July and August after strong growth during the spring
  • GB cull sow prices increasing rapidly and at 16 month high, as the EU export market strengthens
  • EU pig supplies starting to tighten, with slaughterings down two per cent year on year in May
  • Strong UK pork and offal exports continue on the back of demand from China/Hong Kong
  • Better weather and positive economic news combining to boost UK consumer confidence
  • Cereals prices falling but with less UK wheat and more barley available, price gap may mean more barley in rations
  • Larger crops forecast for 2013/14 across major crop-growing regions of the Northern Hemisphere
  • Export competition set to be greater this year, with Black Sea region back in the market, keeping prices low

Pig Market Trends is available free of charge. Subscriptions are available by e-mailing [email protected] Recent editions can be downloaded from the BPEX website by clicking here.

Canadian herd stable

Latest figures from Statistics Canada show that the size of the Canadian pig herd on 1 July was similar to a year earlier. The breeding herd was virtually unchanged from last year, while a small increase in productivity led to a 1% rise in pigs being raised for slaughter. The number of pigs slaughtered in the first half of this year was 1% lower than a year earlier.

The data also show that the number of sows farrowed during the first half of the year was down 4% on a year earlier. As a result, the pig crop was around 2% down, with a similar decline in farrowings expected in the second half of 2013. Despite this fall, lower exports of weaners to the US meant that the number of pigs on farm was slightly higher.

DOWNLOAD REPORT:- Download this report here

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