Within the week ending April eighth, the GB Normal Pig Value (SPP) reached a brand new document excessive of 216.7p/kg deadweight, based on the most recent market commentary from High quality Meat Scotland (QMS).
This was 37% increased than the identical week final yr and 45% above the five-year common. Whereas the market has traditionally edged increased in March and April, the weird characteristic in 2023 has been a gradual upwards development for the reason that starting of the yr, with the SPP rising by 8.3% in 13 weeks.
“Whereas a big a part of the year-on-year change displays the sharp improve in pig costs between spring and summer time 2022, when pork processors had supported costs in an try to guard future safety of provide, the additional worth carry in 2023 seems to have been pushed by a pointy tightening of provide.”
Iain McDonald, QMS Market Intelligence supervisor.
Iain Macdonald, QMS Market Intelligence supervisor, defined: “Whereas a big a part of the year-on-year change displays the sharp improve in pig costs between spring and summer time 2022, when pork processors had supported costs in an try to guard future safety of provide, the additional worth carry in 2023 seems to have been pushed by a pointy tightening of provide.”
Going again to June 2022, whereas a census was not carried out in Scotland, the census outcomes for England had proven year-on-year declines of 17% within the English sow herd and of 1.4% in prime pigs on farm. Just lately printed December census outcomes confirmed that the tempo of year-on-year sow herd contraction in England had reached 20%, whereas the year-on-year fall in prime pigs had accelerated to 7.9%.
This lagged influence on the prime slaughter market is mirrored in Defra slaughter statistics as GB abattoir throughput fell by lower than 1% year-on-year between June and November 2022. Nevertheless, slaughter numbers then fell by 8.7% on a yr earlier in December 2022, adopted by declines of two.6% in January and 18.6% in February. Over the three months to February 2023, prime pig throughput at GB abattoirs fell by 10.1% year-on-year and was down by 8.4% on the five-year common. In the meantime, information from ScotEID confirmed an 18.5% year-on-year discount in pigs leaving Scottish farms for slaughter within the first quarter of 2023.
Rebalancing of carcase weights
Iain continued: “Including to this decline in pig availability has been a rebalancing of carcase weights from the elevated ranges seen over the winter of 2021/22. With abattoirs capable of deal with the quantity of pigs prepared for slaughter this yr, the common carcase weight of normal pigs at worth reporting abattoirs was round 6% behind yr earlier ranges between December and February.
“Consequently, the year-on-year decline in prime pig throughput of 10% within the December to February interval at GB abattoirs became a 15% discount within the quantity of pigmeat produced.”
Over and above this fall in prime pigmeat output, the quantity of sow meat produced for export and additional processing has fallen much more sharply, with GB abattoir throughput of sows and boars down by 24% year-on-year within the three months to February 2023. Whereas a few of this decline displays the elevated sow slaughter ranges of winter 2021/22 attributable to herd contraction, throughput was nonetheless practically 14% under the five-year common, a stronger decline than for prime pigs.
Defra figures spotlight the size of the decline in UK pigmeat manufacturing this yr, with the UK producing 25,800 fewer tonnes within the first two months of 2023 in comparison with 2022, greater than double the 12,500 tonne improve in UK pigmeat manufacturing that was seen within the calendar yr of 2022.
In the meantime, after adjusting home pigmeat manufacturing to account for import and export volumes, complete UK pigmeat market provide is estimated to have fallen sharply since summer time 2022. The estimated decline between July 2022 and February 2023 is sufficient to greater than offset the earlier carry in provide from the primary half of 2022.
Iain highlighted: “In addition to diminished commerce flows, the worth of pigmeat imports and exports can have been having an influence on the home pig market. Certainly, the common worth of pork imports to the UK from the EU rose sharply in 2022, reflecting the surge in EU pig costs. Within the first two months of 2023, the common worth per tonne imported to the UK from the EU was 26% increased than a yr earlier, whereas exports averaged 78% costlier than in early 2022.”
These exterior pricing pressures are more likely to have continued on condition that EU pig costs have risen at practically twice the tempo of GB costs for the reason that begin of 2023, narrowing the distinction between GB and EU farmgate pig costs to round 4-5% for the reason that starting of March in comparison with a spot of round 12% at the start of the yr.
Iain added: “Wanting ahead, the sharp decline in pig numbers reported in England in December 2022 means that home provide is about to stay tight for a lot of this yr. Though the steep fall in sow slaughter in early 2023 could possibly be an indication that some producers are starting to rebuild herds now that farmgate costs have rebalanced increased and the price of straight feeds has fallen again sharply, any restoration in prime pig numbers will come at a substantial lag.
“In the meantime, exterior components look set to help a good home market. Within the EU, the pork market continues to look tight. Certainly, EU pigmeat manufacturing diminished by 5.6% in 2022 and the EU Fee is forecasting a 5.1% decline in 2023. Whereas the EU Fee had been anticipating pork import volumes from non-EU sources to rise in 2023 to help consumption, tight provide within the UK restricted the quantity exported from the UK to the EU in January and February.”
McDonald concluded: “Wanting additional afield, the Chinese language pork market has softened barely additional in current weeks after an enchancment in provide led to a pointy fall in wholesale pork costs between October 2022 and February 2023.
“Nevertheless, there are reviews of a spike in circumstances of African Swine Fever in China and futures market pricing in China means that merchants predict provide to tighten within the second half of the yr, probably supporting demand for imports. Equally, there have been reviews from the Philippines that ASF is resulting in a scarcity of pork.”