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Is the clock ticking on a recovery in the UK pig market?

Many farmers have been operating significantly below production costs for several months


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In the first full week of 2016, UK pig prices saw one of their biggest weekly falls on record
In the first full week of 2016, UK pig prices saw one of their biggest weekly falls on record

The clock could be ticking on a recovery in the UK pig market with some producers already understood to be leaving the industry amid dangerously low prices.

 

Speaking to Farmers Guardian, both AHDB and the National Pig Association (NPA) revealed concerns about the industry’s lack of profitability.

 

The concerns came as major pig company Midland Pig Producers announced plans to close farms this week. The firm will enter consultation with workers at two of its ten sites about closure in reaction to the current state of the UK pork market.

 

Pig markets fell heavily in the first week of the year, with the standard pig price falling 2.82p/kg to an average 116.95p/kg in the week to January 9, which the NPA said was one of the largest single-week price falls in memory.

 

Stephen Howarth, market specialist manager for AHDB Pork, said pig prices had fallen for much of the past two years.

 

“Whether this [recovery] will come in time I do not know,” he said. “We are starting to see people stopping producing.”

 

He claimed some European markets had seen prices beginning to improve, but said UK recovery was likely to be a slow process.

 

“There are more pains to get through before we get there,” he said. “I think we probably have a few more months of relatively low prices.”

 

Speaking about the early January fall in price, Mr Howarth said markets often declined after Christmas, due to slow demand and leftover supplies. He claimed prices may continue to drop for the next few weeks.

 

Dr Zoe Davies, NPA chief executive, issued concerns about the future of the UK pig industry, with many producers selling pork below their costs of production.

 

“We had a 3p/kg drop, which is the biggest drop I can remember seeing in one week,” she said.

 

“We do not expect trade to pick up again any time soon. The [EU] price has gone up a few euro cents, but there is a bit more positivity in EU markets than here,” he said.

 

Dr Davies also pointed to retailers, suggesting intense competition was playing a part in driving down UK pork prices.

 

She said: “It is not even that the retailers are dropping prices and encouraging consumers to buy more. It is frustrating.”


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