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Producers 'angry and frustrated' at dismal prices offered by processors

2nd May 2019 / By Alistair Driver

British pig producers are furious at the ‘dismal’ prices currently being offered at a time when the global pork market is buoyant on the back of soaring Chinse demand, NPA chairman Richard Lister has warned.

The EU-spec SPP rose by just over 1p to reach 139.84p/kg last week. Following recent tiny increases, this represented the largest weekly rise since June last year and the highest price since the first week in January.

Nonetheless, the price is still around 6p below the price this time last year and the increases seen in April pale into insignificance in comparison to what is happening in the EU.

Danish Crown chief executive Jan Valeur recently described the surge in demand for EU pork from China, prompted by its African swine outbreak, as a ‘game-changer’ – the processor’s export volumes to China have doubled since February.

The latest Eurostat figures show EU fresh and frozen pork shipments to China were up by 16% (+19,600 tonnes) year-on-year in January and February, which has had a big impact on EU pork prices.

The EU reference price has soared from 117p/kg in early February to nearly 146p/kg in the week ended April 22. Most major producers have seen massive hikes over that period, including Germany (122p/kg to 153p/kg), the Netherlands (106p/kg to 138p/kg), Denmark (110p/kg to 136/kg) and Spain (110p/kg to 143p/kg).

This AHDB graph illustrates how UK prices have been out of step with those across the EU in recent weeks. 

EU Reference price Ap 19

 

The China effect is being seen on prices all over the world, also including the US, where prices have almost doubled since February, according to Genesus’ Jim Long.

UK pork exports to China were up 40% year-on-year in February – and yet the UK price is still almost exactly where it was at the start of February.

Dismal prices

Richard has received a number of calls from angry producers who want to know what is happening. “The price we are getting is dismal, especially in the context of what is happening with China,” he said.

“As the EU pig price surges ahead, UK pig producers are left feeling like the modern day Oliver Twist. Faced with heavily over-stretched overdraft facilities, producers were entitled to breathe a sigh of relief at the increase in EU prices.

“Sadly, this relief has turned to anger and frustration at the scraps being offered over the last four weeks. Processors will know full well the pressures producers are under, with owning so many of their own sows, and having seen another significant independent producer disappear.

“I have had numerous producers ringing me during the last fortnight wanting to understand why we are not seeing a proper and significant recovery in their price. It is important producers make their feelings known to processors and marketing groups because we need a fairer share - just like Oliver Twist.”

The NPA has been collecting data from members about the current market situation, which chief executive Zoe Davies said was proving to be ‘illuminating’.

Unless there are clear explanations from processors as to what is happening and a rapid and significant change in the prices being paid, the NPA will share the information with Groceries Code Adjudicator, Christine Tacon. She recently announced a commitment to work with industry to explore improving transparency and access to prices along the supply chain.

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