Global prices falling from record high
This year, global pork prices have reached unprecedented levels.
This year, global pork prices have reached unprecedented levels, based on analysis of export prices from the four main global exporters (the EU, US, Canada and Brazil). Prices began to rise in March as the impact of PEDv began to hit slaughter pig numbers in the US, Mexico and Asia, meaning both a tightening of supplies and an increase in demand on the global market. Prices peaked over the summer at around $3.50 per kg, 20% higher than a year earlier. Since then, they have fallen back but, by September, they remained well above the previous peak, at £3.26 per kg. This came despite the amount of pork traded by the four main suppliers in the third quarter of 2014 being down 8% year on year.
The recent price decline has been driven by two main factors: the Russian ban on imports from the US and Canada (as well as the EU) and the lower than expected impact of PEDv in the US, given heavier carcase weights. The Russian ban had a particularly strong effect on Canadian export prices, which fell from US$3.69 per kg in July to just $3.13 in September. US export prices were also lower but this was mainly driven by a fall in domestic prices. In contrast, Brazilian prices increased further as Russian demand turned in that direction, rising from an already inflated $3.66 in July to $3.98 in September (and as high as $4.19 in October).
Unlike the other major players, EU exporters have not seen the benefit of higher prices. The Russian ban imposed in January means that this year’s average dollar price for EU pork exports of $3.19 was only slightly higher than last year’s £3.13, with the euro price 1% down on the year. This does mean that the EU has been the lowest-priced exporter this year – it is normally the highest-priced – which has helped it to find alternative markets for the pork which it previously sent to Russia.