Back in profit...
Although the availability of pigs within Europe is predicted to fall, prices in most EU countries came under pressure during September, as a temporary increase in pig supplies occurred as a result of the delayed effect of the hot summer. UK pig prices, however, moved in the opposite direction, enjoying good demand for ‘British’ from the major retailers’ post-Horsegate. Current indications point to a period of improved profits for British pig producers.
Despite the longer-term reduction in availability of pigs, prices across most of Europe declined from the record peaks achieved during the summer months. There was an improved supply of pigs in September as the very hot weather depressed growth rates during the summer months, resulting in a delayed rush of pigs coming onto the market. Consumer demand for pig meat remained subdued, as it appeared that higher prices were now curtailing retail offtake.
Although pig prices also fell back in Denmark, the latest research from the Danish Pig Research Centre confirmed that 2012 had proved to be a profitable year for the majority of pig farmers with high grain prices, while significantly adding to the cost of producing pigs, nevertheless proving a crucial factor in boosting the overall profitability of Danish pig farming enterprises, who run crop production alongside their livestock business. In particular, the top third of Danish famers made significant profits during the year.
The outlook for 2013 is also positive, although average profits will not reach the levels of the previous year. The current forecasts also predict that profitable pig production in Denmark will continue into 2014 and 2015
Bucking the trend on mainland Europe, pig prices in the UK moved upwards to new record levels during September and the Deadweight Average Pig Price (DAPP) passed through the 170p per kg mark, benefitting from the fall-out from ‘Horsegate’, as a number of retailers sought to increase their facings of British pig meat. As grain prices continued to fall back, the average ‘Cost of Production’ continued to decline and UK producers now look set for a sustained period of profitable production.
Figures recently published by DEFRA showed that the number of UK holdings with pigs actually increased but around half of the total were ‘hobby farms’ with less than 10 pigs. More significantly, the figures showed that 80% of UK pigs were now kept in larger holdings of more than 1,000 pigs.