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Feed Price Jump Impacts Pig Producers

by 5m Editor
4 April 2011, at 10:28am

GLOBAL - Pig producers across Europe continue to be severely hampered by high feed costs, according to David Owens from the Meat Division at Bord Bia.

Tensions in the Middle East and the earthquake in Japan have resulted in extreme movements in cereal markets in recent weeks.

Uncertainty in the market has seen LIFFE prices in the UK for feed wheat falling from a peak of £210/tn in early February to £167/tn in mid March, before rising back to £197/tn last week.

This week’s USDA acreage report suggests that US farmers intend to plant 5 per cent more acres of corn this year, which would be the second-largest planting since World War II. Growers also plan to plant 8 per cent more wheat with reduced plantings of soybeans expected in order to make room for corn and wheat.

The USDA said stocks of corn around the country have dropped 15 per cent from a year ago. Futures prices for wheat and corn at the Chicago Board of Trade were up by around 5 per cent this week with May futures contract for corn up by 30 cents to $6.93 a bushel.

Despite a rise in pig prices across Europe in recent weeks, Irish pig producers remain in a loss making situation. The latest Teagasc figures for March show that pig feed costs in Ireland have increased by 27 per cent in the past year, and while pig prices are higher they are insufficient to cover costs.

The pig meat storage scheme introduced in late January by the EU Commission had 144,000 tonnes in applications, with the bulk of this product coming from Germany, Denmark, Spain and the Netherlands.

The introduction of this scheme has been crucial for the rise in prices across Europe, as overall consumer demand within the EU has been subdued.

Outside of the EU, the decline in the North American pig herd has slowed down, with producer prices expected to hit record levels in 2011. With a decline in US supplies and strong prices, EU product is more competitive on International markets. Asia in particular has seen strong demand for pigmeat imports this year.

With moderate growth in domestic pork production and high domestic pork prices, China’s pork imports are forecast to increase this year by 15 per cent to almost 500,000 tonnes.

In South Korea, the removal of close to a third of their domestic herd due to FMD has led to a rise in imports this year, while Japan has also seen a pickup in demand.

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