Boost for pig producers as farmgate prices show 35% increase

Analysis: SPP reaches high of 151p a kg after spell of downward pressure

Farmgate pig prices in Scotland have strengthened after a period of downward seasonal pressure during the initial weeks of 2017.

According to analysts from QMS’s economic services team, the Great British standard pig price (SPP) began the year by sliding back marginally in seven out of the first eight weeks.

Prices slipped, they said, from 151.9p a kg deadweight at the close of 2016, to 149.6p during the week ended February 25.

Prices then increased to a nine-week high of 151p a kg in the third week ofMarch – a 35% increase on the same period in 2016.

“While this impressive year-on-year increase will be of comfort to producers, it should be noted that the market remains below the levels ofMarch 2014, while feed prices have also risen sharply over the past year,” said senior analyst Iain Macdonald.

He said the spot price available to producers for pigs, outwith regular contractual deliveries, remains a key barometer of the prevailing market conditions.

“Whenever spot prices fall below contact levels it points to a well-supplied market. However, at times when processors are having to seek supplies from outside their regular scheduled deliveries, the spot market will firm,” he added.

According to Mr Macdonald, while sources indicated that spot prices were falling until early February, they had risen to above contact levels by the start of March.

This, he said, represents tight supply relative to demand and, as a result, the recent lift in SPP has come as a surprise.

InScotland, thesowherd is estimate to have expandedby1.5% to a six-year high of 37,800 head, although gilts retained for future breeding fell by almost 30%.

“The market remains below the levels of March 2014”