EU sow price passes peak
EU sow prices continued to rise throughout the third quarter of 2016 but have begun to drop off in recent weeks, following declining EU pig prices.
The German sow price peaked at €1.36/kg for week ended 2 October, a level last seen during July 2014. Prices in Denmark, France and the Netherlands also reached a maximum at this time, although at a discount from the German sows. In the subsequent three weeks the German price has fallen 8c to stand at €1.28/kg, with the other key European nations also showing comparable declines in sow prices.
Falling EU finished pig prices, possibly due to a short-term increase in supplies on the market, are likely responsible for deflating cull sow prices. With supplies expected to tighten into next year, following a decline in the EU breeding herd, while Asian demand remains strong, cull sow prices are likely to remain above year-earlier levels in the coming months.
Further weakening of the pound against the euro during October delayed the decline in EU sow prices from being reflected in sterling terms. For Germany, the sow price did not show a week-on-week fall when converted to sterling until the most recent week, ended 23 October, when a significant decline of over 3p was recorded. This is the largest weekly fall since November 2015, although at 115p/kg prices still remain nearly 36p/kg more than during the same week last year. With the recent price deflation slow to translate into sterling terms, GB sow prices reportedly continued to rise throughout much of October. However, with the pound now plateauing, declines in sow prices are beginning to permeate the domestic market also.
Bethan Wilkins, Trainee Analyst
email@example.com, 024 7647 8757