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Better Outlook

Despite the decline in the sow herd at the end of last year, the AHDB forecast that the number of UK pigs slaughtered would remain fairly stable over 2013 as a whole, and some further growth was predicted during 2014. Rabobank forecast better pig prices over the next 18 months, with limited supply increases and improving demand in a number of key global markets.

Although UK pig prices stalled during late July and early August, the latest AHDB forecasts predicted very little change in pig slaughterings over 2013 as a whole. Despite the reduction in the sow herd recorded at the end of 2012, improving productivity meant that the fall in production had been less than anticipated and it was likely that slaughterings would again reach over 10 million in the current year.

The prospect of lower feed costs into the autumn was also a factor in restoring confidence to producers and the data now indicated that prices had moved significantly ahead of the average costs of production, with the larger, more efficient producers, in particular, experiencing much improved returns.

The market analysts at Rabobank also took a positive view of global market prospects for the remainder of 2013 and 2014. Pig supplies in the EU would contract but this would be offset by production increases in a number of major pig producing countries, as the benefits of lower feed costs were felt. Demand within the EU would remain subdued, but better demand in China and other global markets should support rising prices.