Positive price support outlook for UK pigmeat
“Depending how consumers respond to the economic uncertainty post-referendum, prices could continue to strengthen in the second half of the year, as they have done in the second quarter of 2016,” said AHDB Pork.
Although domestic production growth is expected to “draw back” in the second half of this year, output will still be ahead of 2015 levels.
Despite this, a shift in the balance of trade, with imports down against increasing exports, the forecast is for a reduction in “available supplies” over the coming months.
“This should provide the market with much needed stability, after two years of tough times, and may result in the pig price continuing to rise,” said AHDB Pork.
“Decreasing imports, coupled with an increase in exports, are forecast to offset any rise in production. It is therefore projected that supplies available for consumption on the domestic market will be down on last year’s levels. In fact, they will return to a similar level as in 2014.”
In addition, with the pound expected to remain weak, further reductions in imports and growth in exports are expected for early 2017 and, potentially, for the year as a whole.
The outlook report also notes that the level of productivity growth within the UK remains the key driver of future production increases. ■