EU sow prices remaining low as Brexit approaches
The EU sow price, and particularly the German price, is of great importance to the UK as it provides a good indication of probable trends in GB cull sow prices.
Average GB prices haven’t been publically available since 2013, however historically they have generally tracked German prices, albeit at a lower level. The German M1 sow price has fallen back a little since the autumn, despite broad stability in the finished pig market. The normal seasonal closures of processors over Christmas has likely contributed to the recent downward pressure, with supplies temporarily pushing ahead of available capacity. The German price was €99/100kg for the week ended 20 January, over €2 lower than the start of October, but very similar to the same week last year.
Trends have been similar across the continent, with the price for Dutch sows also dipping a little in recent weeks, while the Danish price has been falling more significantly. Since the peak in early autumn, sow prices in Denmark have fallen nearly €24/100kg. In the most recent week ended 20 January, the Danish price stood at €68/100kg. Sow prices in the Netherlands are generally more in line with the German price, and this was also apparent in the latest week when prices also averaged €99/100kg. This was again similar to the same period in 2018.
The tariff on pig carcase exports to the EU is already equivalent to over half of the German/Dutch farmgate sow price. It represents nearly 80% of the Danish price, which is likely closer to where the British price is a present. With little sign of upward movement, this is unlikely to change significantly before the end of March. Therefore, producers may soon be facing a situation where cull sows are worth a fraction of their present value.
Bethan Wilkins, Analyst
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