Market Update for Week Commencing
17th November 2008
The Bank of England predicted very recently that GDP in UK would be -0.5% for 2009. The European Central Bank at the same time forecast that UK, Spain & Ireland would have lower GDP figures than most of the other 24 states. Yesterday it was announced that Germany had technically already hit recession. So much for professional forecasting. I have never been comfortable in making predictions and although we know that EU pigmeat production is set to fall significantly, demand as well as supply is a function of price and no one knows where that will be. Certainly there has been some trading down in EU but poultry meat appears to be the main benefactor. Pigmeat is a relatively cheap source of protein & £sterling is a relatively cheap currency (with further falls likely when BoE reduce the base rate again); these facts should negate some of the impact of falling disposable incomes. £ has taken a pasting this week (85.8p/€ today) which has had the effect of lifting sow prices by around 3p/kg today. DAPP fell by 1.24p (133.55) but thankfully spot prices are steady. Weekly prices (Tulip & Woodheads) dropped 1p and Scottish prices 1.5p. Again there has been little downward pressure on cutters & their demand is stable. I would seriously recommend to all producers to keep on top of their weights and take advantage of any increased demand for lighter pigs pre-Christmas as demand afterwards could be poor.
