Pig Meat Supply

The second half of 2013 was much better for pig producers compared to 2012.  The rise in pig meat prices and the fall in feed costs has seen negative margins turning positive.  But this has followed a long period of losses and is not expected to result in any significant expansion in the breeding herd according to the latest forecasts from BPEX.  Even so pig meat production is forecast to increase during 2014, particularly in the second half.

Sow productivity has been consistently improving over recent years; this trend continued in 2013 it is also expected to carry on through 2014.  Output is forecast to reach 24.5 pigs per sow per year by the end of 2015 compared to 23.0 per sow in 2013.  After three years of growth the breeding herd fell in 2012 resulting in slaughterings in 2013 being very similar to 2012.  However, due to a reduction in feed prices, carcase weights were higher with processors keen for heavier weights to compensate for less numbers.  Looking to 2014, heavier carcase weights are expected to continue especially through the early months of 2014 when numbers remain tight and are not expected to ease too much unless feed prices rise significantly. 

Even though domestic production was reduced, imports in 2013 were also less than in 2012.  EU supplies have also been relatively tight, but in the wake of the horsemeat scandal retailers have preferred home produced pig meat.  Imports are forecast to increase in 2014, but by how much will depend on whether retailers’ attitudes change to home produced pig meat which could be further swayed if the EU price remains as far below the UK price as it currently is.

Perhaps surprisingly, UK exports in 2013 were strong.  The Chinese market did add to these, but exports to other EU Member States still represent 70% of the export market and this remained good.  This is forecast to increase in 2014, as production in the UK increases, although the recent strengthening of the Pound against the Euro may make UK exports less competitive.

Taking all the supply and demand forecasts from the above analysis, supplies available for human consumption are likely to be higher than in 2013, but still lower than in previous years, which shouldn’t put too much downward pressure on prices.  The table below summarises the situation;

The actual and forecast supplies of pig meat in the UK

Source: DEFRA, AHDB.  Figures in italics are forecasts