UK and EU pig prices pick up amongst a background of high costs and improving demand

In the week ending 17 September GB deadweight pig prices finally hit the elusive £2/kg with the EU-spec SPP averaging 200.22p/kg. This will be a morale booster for many producers with prices edging closer towards the average cost of production. However, does this latest increase widen the gap in prices between domestic and EU product?

On the continent, input cost inflation is also being felt, causing a shortage of supply and pressure on prices. In the 4 weeks ending 11 September, EU deadweight pig prices increased in all key regions but remained at a discount of between 13p to 42p to UK prices. Germany saw the largest increase, with prices up nearly €18/100kg. France, Denmark and the Netherlands also saw large price increases, each up by over €10/100kg while Spain gained just under €3/100kg over the 4-week period. Using current exchange rates this equates to German pig prices sitting at 187p/kg, closely followed by France and Spain at 185p and 183p respectively. Denmark and the Netherlands hold the lowest prices at around 159p/kg.

Production of pig meat is forecast to drop year on year by the end of 2022 in both the UK and the EU. This will further tighten supplies in a period where demand typically increases, keeping prices supported. However, reduced domestic production will also impact on trade, with imports likely to increase as domestic supplies tighten – especially if UK prices remain at a premium.

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