Pig price continues to rise in run-up to Christmas

The UK pig price continued its upward curve in the run up to Christmas, although the latest increase was the smallest for some time. 

The EU-spec SPP rose by just 0.16p/kg on the week to reach 151.82p/kg in the week ended December 17.

This measure of price has now risen for 37 consecutive weeks since the unsustainable lows of early 2016 and is now nearly 28p higher than the same week in 2015, following declines seen last year.

Price increases have continued as procurement for the Christmas period draws to a close but more supplies have been available, as some producers pulled pigs forward ahead of the holidays, limiting increases, AHDB Pork said.

Estimated slaughterings rose by 3 per cent on the previous week to 197,000 head as Christmas approached. However, significantly, this remained 2 per cent lower than the same week last year as supplies this year remain tight.

Carcase weights continued their decline, which began in December, with a sharper fall of over half a kilo seen this week, falling to 82.22kg. This is still 1.3kg higher than the same week in 2015.

Analysts have been predicting the increase in UK pig prices would start to level off towards the end of 2016 and early 2017, as the pound showed hints of a recovery and EU prices fall.

EU decline reversed - for now

The declines seen in the EU average pig price since September have come to an end in the past four weeks, with prices rising by just over €4 to reach €155.12/100kg in the week ended 11 December.

As prices were still falling at this stage last year, the gap between this year’s and last year’s prices has widened, leaving prices over €29 ahead of the same week in 2015.

AHDB cautioned that the the rise in prices is likely to be due to a seasonal rise in demand in the build up to the Christmas period, while supplies are thought to have been tighter following some rationalisation of breeding herds in key producing countries.

With the Christmas procurement period coming to an end, prices could begin to come under more pressure in the coming weeks, it predicts.

The average gap between EU and UK prices remains substantial, with the EU reference price currently stated at around the 130p/kg mark. Even taking into account differences in the way prices are calculated, this suggest UK pigs are typically 15-16p/kg dearer than the EU average.