EU pig price stabilising
Following the peak experienced in September, EU pig prices fell for the 14 weeks to the end of the year and reached levels not seen since April 2005. However, it would appear that the price has started to stabilise over the past month at around €126 per 100kg.
In sterling terms, the average price has now risen from below 90p to 93.16p/kg (w/e 10 January) following the low at the beginning of December, mirroring the weakening of the pound against the euro. EU pork consumption also appears to be continuing its decline but the rationalisation in the breeding sow herd in Germany, which is likely to be replicated in further member states, may be leading to a tightening of supplies in the EU market.
The beginning of the price stabilisation could be partially attributed to the Private Storage Aid (PSA) Scheme implemented by the EU at the beginning of January. Already applications totalling over 70,000 tonnes have been made, dominated by Spain, Germany, Netherlands and Denmark, with boned legs being the most prevalent cut. It remains to be seen whether the PSA scheme fully negates the post-Christmas price drop that is historically observed.
German prices have seen a modest improvement over the latest week, of €1.60 per 100kg, although it may be too early to say whether this is a turn in trend. Danish prices fell by a further €3 in mid-December but have since stabilised. Spanish prices fell again at the beginning of January following a relatively stable December, and have lost €38 per 100kg since their peak in August. Dutch prices, however, have trended upwards over the past three weeks and are now almost €5 above their low at the beginning of December. In euro terms, UK prices have experienced a fall of €16 since the end of November, which has reduced the gap to the EU average to €33 per 100kg (24p/kg).