Increase in hogg price benefits producers

Developments in farmgate prices have been positive over the past month with cattle, hoggs and pigs all showing improvement, according to Quality Meat Scotland (QMS).

“Pig prices have seen an increase of 1.5%, cattle prices an increase of 2.7% and hogg prices have increased by 12%,” said Stuart Ashworth, QMS Head of Economics Services. “These increases are welcome given the challenges producers are facing in relation to purchased feed prices and the extreme weather.”

With the exception of cattle, where availability remains below year earlier levels, the volume of stock reaching the UK market has increased pointing towards a general firmness in demand.

“The most striking market behaviour has been in the hogg market,” said Mr Ashworth. “UK slaughter statistics show an increase of 13% in hogg slaughtering during January and February, although Scotland has a more modest 2% increase in the kill.

“Indications are that hogg availability, compared to last year, increased during March, possibly influenced by the early Easter holiday,” added Mr Ashworth. “Nevertheless, the underlying theme of price increase, alongside availability increase, has continued through March. Auction sales immediately after the Easter holiday also show further price increase emphasising a general strength in the hogg market rather than an Easter effect.”

However, it’s not just the UK that has seen this improvement. “Hogg availability has also been high in Ireland where export abattoirs have, since the turn of the year, handled a third more lambs than they did last year,” said Mr Ashworth. “Their prices have reflected the GB market and continued to increase and stand ahead of this time last year.

“In fact, prices have improved in the past month in all major European sheep producing countries although, in general, they are still lower than they were last year on mainland Europe.”

In New Zealand, lamb slaughterings continue to run at a higher level than last year as dry conditions are encouraging sales at a lighter weight.  However, the volumes have outweighed the weight change and production in New Zealand has increased.

“There have been higher New Zealand export volumes during January and February,” said Mr Ashworth. “However, the UK has not been the main target for these exports, with little change in January deliveries and provisional data suggesting lower deliveries in February.

“Because of New Zealand finding profitable outlets closer to home, the European market has been more receptive to deliveries from the UK and Ireland.  Exports from the UK, for example increased 7% in January compared to a year ago with modest increases in deliveries to France, Germany and Italy.”

With the results of the December UK census showing a minimal increase in the UK ewe flock, the prospect for an increase in the 2013 lamb crop is eroding fast due to the extreme weather conditions which occurred just as lambing was approaching its peak.

“Notwithstanding the seasonal peaks and troughs of lamb production, the 2013 marketing year is likely to see some reduction in product availability continuing to support price levels,” said Mr Ashworth. “At the moment, the UK and European red meat market remains tightly supplied benefiting producers if not consumers.”