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Steady as she goes

GB pig prices retained their premium over continental prices in recent weeks. As feed prices continued to fall back, the vast majority of producers have now returned to profit. UK pig meat supplies showed a small increase in the first nine months of the year but it appeared that higher prices were affecting retail demand. However, British producers continue to experience higher cost levels than most of their EU competitors, primarily due to smaller litter sizes.

As EU prices faltered in recent weeks, GB pig prices maintained their historically high levels over 170p per kg. Feed prices continued to edge downwards and the gap between the Deadweight Average Pig Price (DAPP) and the average UK cost of production continued to widen.

In the first three-quarters of the year, UK pig slaughterings were slightly up on 2012 (+0.2%) but pig meat production rose by 0.9% due to heavier carcase weights.

Higher retail prices continue to weaken demand for three of the main pig meat categories (fresh pork, bacon and sausages) – only sliced ham continued to exhibit both value and volume growth in the latest quarter.

BPEX recently published the results of the Interpig Survey, which compared ‘cost of production’ in a number of major pig producing countries ('2012 Pig Cost of Production in Selected Countries').

While Britain closed the gap on a number of its EU competitors in 2012, registering an average cost of production of 153p per kg, it still performs significantly above the EU average of 140p per kg – and well ahead of Denmark and Holland at 135p per kg.

A number of factors contributed to higher costs, including cost of feed and lower slaughter weights. But the main factor was lower sow productivity and litter sizes. Average GB litter size was 11.5 piglets compared to the EU average of 12.7. Even discounting lower litter sizes in outdoor units, the average indoor litter size in the GB was 12.1 piglets compared to the Danish figure of 15.1.

In Britain, sows produce an average of 24.0 weaned pigs per annum, compared to 29.6 in Denmark.