UK pig meat production growth set to continue
With expectations that the breeding herd has grown this year, our forecasts suggest UK pig meat production is set to continue increasing in the coming months. Nevertheless, reports of challenges to productivity this summer mean the supply increase may be limited early next year.
Physical performance did seem to be recovering early this year, however, it seems disease outbreaks may have disrupted this upward trend. Therefore, there is better growth potential for pig slaughter in the second half of 2020.
Overall, clean pig slaughter is forecast to increase by about 2% in 2020, compared to this year. However, growth may stall for a while early in the year.
Pig meat production is expected to rise slightly faster than slaughter, due to a further small rise in carcase weights. Again, this trend is expected to be biased towards the latter half of the year.
EU prices have been well above UK ones since the spring, though the gap is now closing. Unsurprisingly, imports have fallen significantly (-9%) as this product loses competitiveness. Assuming a more typical UK price premium returns next year, there may be some limited recovery in these shipments.
With strong demand from China and a weak pound, exports have increased again this year. Prospects remain good for 2020 as the ASF crisis continues.
The sharp drop in imports means supplies available for consumption on the domestic market have been noticeably lower this year than last. Domestic demand has also been falling though, limiting the upward pressure on pig prices. Supplies may recover a little in 2020 but will remain low by historical standards. Demand on the domestic market contrasts starkly with the export market at present, meaning they are increasingly competing for the same types of product. This may help support prices, but also risks further shorting the UK market.