UK pig prices have continued to increase to a new all-time record, as tight supplies and strong EU prices continued to drive the pig price forward.

In the latest EU short-term outlook, production of pig meat is forecasted to decline by a further 5% in 2023, this follows a decline of 5.6% in 2022, the lowest production in almost a decade.

“Across the UK, the supply will be down 25% on the year, with the same demand still there, which is causing the price pressure,” said Andy McGowan, managing director at Scottish Pig Producers, with prices for the week ending April 1, for Standard Pig Price hitting 215.49p per kg, up another 1.55p on the week and a rise of an astonishing 64.94p on the year.

However, estimated GB clean pig slaughterings for the previous week were 147,800, or down 42,300 per head.

“The inevitable consequence of the last couple of years have been extremely hard on producers for a number of factors to include disease – both animals and human – wars and costs, which have forced people out of business, it has been a slog for farmers and it has pushed us into the position we are in now.

“There are not enough pigs to go around, which is causing pressures on other parts of the supply chain, with some manufacturers closing down and some operating a four-day week if that, to help.

“Prices have jumped an eye watering amount, however the costs went up by 50% overnight last February and the price has taken a while to catch up on this, so much so that it was reported an estimated £700m loss for UK pig producers last year. It takes a while to pay huge debts like that off and the price is just settling to a more balanced position,” added Mr McGowan.

The National Pig Association (NPA) said that along with lower input costs, many pig producers were now starting to return a profit on their production. However, the industry body warned that there was still a “very long way to go to claw back the losses of the past two years”.

The tight supply will continue to support higher prices , which will result in EU pig meat being less competitive on the global market. Exports from the EU are forecast to decline by a further 3% in 2023, following a decline of 16% in 2022 which was primarily driven by a 50% reduction in volumes shipped to China despite growth in other regions.

READ MORE: Pig sector surviving despite crashing prices and rocketing costs

Domestic consumption in the EU fell to 31.8kg per capita in 2022 and is forecast to decline further to around 30kg per capita in 2023. This consumption decline, paired with reduced UK production (the source of almost 85% of EU pig meat imports), leads to a forecasted increase of only 2% for EU pig meat imports in 2023.

For the UK pork industry, this outlook for the EU pork sector may provide opportunities to both the domestic and export markets. As EU pork prices lose their advantage to the UK it may lead to a higher market share of domestic product being made available at retail.

It may also lead to other countries who usually look to the EU when sourcing their pork imports, to consider the UK as well, although this may likely be limited by forecasted increases in production in other major exporters such as the US. These will be interesting developments to watch as the year progresses.

“Pigmeat has been deflating year on year for decades in comparison to other proteins and it is the most exposed to the global market, so this is a bit of a reset and has put more value into the sector all round.

“The price stands throughout Europe, so there is no option to import a cheaper source, we need to support our producers here. There is never much government support for the industry, so farmers do expect bad times as well as good, however the last couple of years has been the worse time in generations.

“The biggest threat in the pig sector now is African swine fever, it is very present in other parts of Europe, but the UK do remain free, and it is vital we keep it out. We export a lot of the more expensive cuts to Asia and Africa, and we don’t want to lose access to those and certainly don’t want to lose our home supply either.

“The farmers with resilient have managed to stay and hopefully we get a better year and are able to re-build some of the businesses and the industry,” concluded Mr McGowan.