Following four consecutive months of slow but steady price increases for prime pigs, the Standard Pig Price (SPP) has again slipped with the industry returning to a ‘more seasonal’ pattern.
Having peaked at just shy of 165p per deadweight kg – the highest seen in recent years – the most recent figures show values fell 0.43p on the week to level at 163.7p.
Weaner prices also slipped on the back of the reduced prime values with 30kg types losing 39p on the week, to level at £60.31 per head, while 7kg weaners dipped by 48p to £44.42.
Prices are, nevertheless, still significantly higher than this time last year with the SPP 25.5p above the trade in 2016, and 30kg and 7kg weaners £14.16 and £10.02 higher compared to the same week last year. 
According to Iain Macdonald, economics analyst at Quality Meat Scotland, a well-supplied market has been reflected in spot pig prices which are reported to have slipped below contract prices in recent weeks.
He said that at times when processors are able to meet orders from contract supply arrangements, they have limited need to purchase additional pigs on the open market, thereby lowering spot prices. 
“One seasonal factor underpinning pigmeat supplies in recent weeks has been an upturn in slaughter numbers,” said Mr Macdonald.  
“Defra slaughter statistics for the UK indicate that weekly average prime pig slaughterings rose by 3-4% between July and August in 2015 and 2016. Data from price-reporting GB abattoirs suggests this was the case again this year, though the month-on-month increase may have been slower at 1-1.5%.”  
In addition to increased availability of pigs for slaughter, carcase weights, he said, tend to rebound by 1-1.5% in August after slumping to their lowest level of the year in July.    
At GB price-reporting abattoirs, 2017 has been no exception with carcase weights rising by around 1% between July and August. When added to the increase in slaughter, it indicates that weekly prime pigmeat production volumes rose by just over 2% between July and August.  
As a consequence of the upturn in carcase weights, the average price paid by GB processors for a standard carcase has continued to edge higher, and, with carcase weights also running above 2016 levels, this was up by nearly 21% on a year earlier.  
However, it should be noted that the cost of compound pig feed has been around 10% more expensive than last year.
Since around a quarter of annual UK pigmeat production is exported and imports account for approximately 55% of domestic consumption, UK pig producers and processors have to operate in an international context.  
On the continent, where there are similar seasonal trends in production, farmgate prices rose strongly through the spring, peaking in June at 15-20% higher than they had begun the year, before cooling by 5% in July and steadying in August.  
Looking across the Atlantic, US farmgate prices peaked in July at around 70% higher than at the turn of the year, but have since dipped back by a quarter following a 5% rise in weekly pig slaughter above its July low point.
“In addition to supply, the Chinese market has been a key driver behind global pig prices over the past couple of years,” said Mr Macdonald.
“A tightening of supply in China led to a sharp increase in imports in 2016. EU countries benefitted from this and collectively grew shipments to China by 85%, helping drive a recovery in farmgate prices from their 2015 low.  
“However, this surge in imports slowed in the second half of 2016 as the Chinese market came into balance. When the Chinese market then moved into oversupply in early 2017, wholesale pork prices in China fell by 20% during the first half of the year and imports fell behind 2016 levels from April.” 
This accelerated to a decline of more than 50% in June and July, said Mr Macdonald, and the latest trade data from the EU and US indicates above average year-on-year declines in exports to China, of around 60%. However, the UK saw a more modest fall of 15% in June.
On a more worrying note, the amount of British pork available to buy in GB supermarkets has fallen. According to PorkWatch, which is managed by AHDB, this does not necessarily correlate to the volume of product sold, as it could mean that with UK production falling, supermarkets may have needed to increase their reliance on imported production.
Across the four bi-monthly surveys conducted so far in 2017, British pork facings averaged 79% of the total market, two percentage points less than the equivalent average in 2016. 
With UK production falling this year, it may be that supermarkets have needed to increase reliance on imported product.