Pigs
The EU-Spec Standard Pig Price (SPP) is at a record high, but is still some way short of the latest estimated costs of production. In the week ending 4th June the EU-spec SPP broke the 180p per kg level for the first time and has seen a further 2.53p increase to 183.10p per kg in the week ending 11th June. However, input costs are rising faster – the AHDB estimated costs of production reached 240p per kg in May.
Poor profitability is also impacting producers in Germany. Germany is a key player in the European pig market, it is both the largest pork producer and exporter. However, according to data from the European Commission, Germany’s finished pig slaughter numbers fell by 9% (790,000) to 7.9m in the first two months of 2022. With exports of fresh and frozen pork declining by a quarter, year-on-year, to 235,000 tonnes over the same period. In particular, shipments have declined to the Netherlands, Italy, Poland and Hong Kong. Due to African Swine Fever (ASF) concerns, Germany is still unable to export to China. Similar to the UK, the sector has experienced low or negative returns, leading to declines in the breeding herd meaning production has been constrained. And this is expected to continue for the rest of the year due to tight margins and ASF in the country. Data in June shows ASF is mainly in the wild boar population along the Polish border with only a small number (<5) of domestic herds affected. But an outbreak has been found near the border with France and Switzerland, although currently it does not appear to be in the wild boar population in this area.
Beef
Finished cattle prices remain buoyant with the GB all steer price increasing a further 1.4p per kg on the week to average 441.6p per kg deadweight in the week ending 11th June up nearly 51p on the year. Those meeting the R4L grade were up 3.9p per kg to 450.6p per kg, demonstrating the importance of continuing to meet confirmation. We often cite ‘cheap’ Irish beef impacting on GB prices, but in the week ending 28th May the Irish R3 steer price moved above the overall GB price for the first time for many years. Irish prices are being supported by strong market conditions on the continent and in the UK as demand increases following the re-opening of the food service sector. In addition, Irish prime cattle numbers have started to tighten, which has led to the recent uptick in prices.
Previously Irish cattle slaughter had been running ahead of 2021 levels. For the first four months of 2022, slaughter numbers were 13% up on the same period a year ago. Data from CSO Ireland also shows fresh and frozen beef exports were up 41% year-on-year for the first quarter with nearly all the increase coming from shipments to the UK and in particular boneless beef to Northern Ireland. Ireland has also been successful in increasing its exports to France and Spain taking advantage of reduced production in the key producing nations of France and Germany. Strong prices in Ireland should continue to support UK values.
Lamb
The finished lamb price, although still historically high, had been running behind 2021 (record) levels. But since mid-May the price has moved ahead of last year’s values. However, as new season lamb (NSL) numbers increase, in the week ending 15th June the GB liveweight NSL SQQ averaged 309.1p per kg, down 22.9p from the week before, as the seasonal decline commences, but still 10.7p above last year. According to the AHDB, for the same week, an estimated 95,300 lambs (new and old season) were marketed – up 6% compared with last year. In contrast, the GB deadweight NSL SQQ averaged 694.9p per kg in the week ending 11th June, up 8.2p on the week and 27.7p more than the same week in 2021.