EU sow prices surge further
The modest increases in EU sow prices seen early this year have accelerated over the past few weeks.
The key German price jumped €0.11 in the three weeks ending 16 April to €1.50/kg, with similar increases also being seen in the Dutch and Danish prices. No movement was seen in the most recent week ended 23 April, however this was likely due to disruption in trade over the Easter holidays. Conversely, the French price has continued to show only small week-on-week price increases throughput April, rising just €0.06 in the four weeks ended 23 April.
In sterling terms, the price rises have been less marked due to some strengthening in the value of the pound. This also meant that in the most recent week ended 23 April, EU sow prices actually fell back slightly. The key German price dropped over a penny to stand at 126p/kg. Despite this, prices are still at levels that had previously not been seen since October 2013. As such, buoyancy has also been seen in the GB cull sow price, even given recent movements in the pound.
Reflecting the finished pig market, tightening supplies have likely been key to driving the rising continental sow prices. Such is the demand for sow meat by German processors that the increase, of 55%, in the sow price in the last year has even exceeded that of the 35% increase in the clean pig price. Estimated sow slaughterings in Germany so far in 2017 have been down over 20% on a year earlier which represents a much sharper fall than for clean pigs which were down 6%.
December 2016 census results for the EU indicate a reduction in the breeding herds of all key producing states bar Poland. In addition to the smaller herd size, improved finished pig prices compared with early 2016 is likely encouraging herd rebuilding, further reducing the availability of cull sows. These factors may keep sow slaughtering levels behind 2016 in the coming months, and so prices might be expected to climb even further moving forwards.
Bethan Wilkins, Analyst
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