Report details tough times for UK pork market

by Erica Shaffer
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LONDON – Bigger isn’t always better, and in the case of the pork industry in the United Kingdom, growing supplies of heavier pigs could mean the end of some pork producers, the Agriculture and Horticulture Dept. Board’s (AHDB) Pork division warned in an overview report of the UK pork market.

The report makes for “grim reading,” AHDB said. Pigs have lost a third of their value since late 2013. Retail purchases of pork have steadily declined despite lower prices. Meanwhile, UK pork is losing ground to cheaper imports from pork-producing countries in the European Union.

Current pork prices are well below the cost of production, AHDB said in its report. In 12 weeks, pork prices have dropped £11 per head (about $15.34). “The price is now at levels that will be starting to hurt producers on a cash basis, as well as a full economic basis. As a result, we may well start seeing producers leaving the industry and there have been signs of this already.”

Last year, pork production in the UK surpassed beef production for the first time since 2003. However, demand has been declining since 2014. Usually, consumption of a product rises as the retail price falls, but that hasn’t been the case for pork.

“Existing research has shown that younger consumers do not identify with pork, and it would not be their meat of choices,” AHDB said in its report. “Furthermore, there is an increasing demand for more convenient offerings, such as ready meals and chilled main meal accompaniments, and pork does not feature strongly in these categories.”

Additional key findings in the report include:

  • There is little sign of herd reduction in the UK because lower production costs offset some price declines in 2015.
  • Tailwinds for the UK pork market are signs that the European supply of pork may tighten in the second half of 2016.
  • The British pound is beginning to weaken against the euro, which is strengthening UK pork in global markets.

Read the full report here: http://pork.ahdb.org.uk/media/271132/pig-market-crisis-briefing.pdf

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