SPP continues steady climb in May

For the month of May the EU spec SPP averaged 220.68p/kg – an increase of almost 2.5p from April, with weekly price increases averaging 0.45p. Hitting 220p/kg has been in producers' sights since the end of March, and was achieved in the week ending 13 May. Since then, the steady upward trend has continued, with prices ending the month (w/e 03 June) at 221.34p/kg.

Improved prices are positively impacting on producer margins. Our most recent cost of production estimate showed that net margins in Q1 (Jan-Mar) 2023 were in a considerably better place than they have been in the past two years, although still at a negative value. As some inflationary pressures and input cost prices have eased over spring, margins look likely to move further into a positive position as summer arrives.

Like the SPP, the EU spec APP has seen growth in May. Averaging 220.12p/kg for the four weeks ending 27 May, this growth is more subdued at just under 1p when compared to the previous four-week period in April. In the final week of the reporting window (w/e 27 May), the APP has moved below the SPP. A spectrum of influences – including a tight marketplace, industry reports over contract commitments and continued pressure on premium product categories at the shelf edge as consumer purchasing behaviours reflect the cost of living crisis – have all influenced this shift.

The estimated GB slaughter for the five weeks ending 03 June stands at 761,700 head, a weekly average of 152,300 head. Compared to the previous five-week period this is a decline of 4% (35,700 head), and against the same five week period last year this is a 12% decline (101,800 head). Carcase weights have eased slightly during the month, with the SPP average for May down 240g to sit at 89.4kg.

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