Friday, February 15, 2013

US pig producers profit margins to exceed European counterparts in 2013


    Projections for the U.S. average margin per pig produced to slaughter weight show a recovery from recent losses back to profitability by April 2013. After that, the U.S. margin is projected to rise above US$20 by June and to peak at almost US$27.50 in August, although a late slide down to the US$6-10 range by year-end is thought likely.
    The signs in the European Union in 2013 are less positive, said speakers at the Outlook 2013 meeting organized by British agricultural development board AHDB. The average EU-27 pig price may fail to reach a general breakeven level of 2 Euros per kilogram deadweight even at the mid-year peak, despite expectations of a 1.5-2.0 percent decrease in slaughtering taking the annual total below 245 million pigs.
    The main problem in Europe will be a relatively flat domestic demand combining with difficulties in competing with Brazil and the United States for valuable export sales. While European pig supplies are likely to be tight, therefore, this may not be reflected in a sufficiently large increase in the pig price to cover rising feed costs.
    This year, animal feed prices have already seen another rise in the average British pig production cost so it was up to GBP 1.67 per kilogram in January 2013, according to AHDB-BPEX calculations, whereas the price received by producers in Britain had slipped back from the GBP 1.61/kg reached at the end of 2012.
    The continuing lack of profitability is eroding UK sow numbers. A further 4 percent reduction, equivalent to about 20,000 sows, is believed to be occurring in the national herd inventory currently. The cutback will outweigh gains in productivity, bringing a predicted 2 percent fall in pigs marketed for slaughter by British producers in 2013. It may be December 2014 before the inventory is restored to the 425,000 sows recorded in June 2012.

No comments:

Post a Comment