The modest improvement in Scottish pig prices in recent weeks has been overshadowed by a surge in feed prices, according to Stuart Ashworth, head of economic services with Quality Meat Scotland.

The higher pig prices, up 1.25p/kg since the middle of June to 150.62p/kg the last full week of July, follow slightly tighter supplies as the volume of prime pigs reaching UK abattoirs decreased between May and June. While improvement in producer price was welcome, the bigger concern for the pig and poultry producers, and to a lesser extent the ruminant livestock sector, was the rapid increase in feed prices, said Ashworth.

Compared with 12 months ago, feed wheat and barley were some 25 percent more expensive, while soya bean meal was almost 40 percent more expensive. “Although the feed grain price may ease a little as the UK harvest gathers momentum, latest futures prices suggest they will continue to trade more than 25 percent higher than last year," said Ashworth. "Similarly, soya bean meal may ease from the current highs over the next six months, but futures prices still remain well above year earlier levels.

“Feed price inflation looks set to remain for some time," he said. "The only relief for Scottish pig producers is that the 40 percent surge in soya price looks modest compared with the 70 percent increase being paid by European producers because of the weakening of the Euro over the past six months. Taking a longer view, the weather-induced delay to the wider European harvest, combined with downgrades on the volume of export grain available from Russia and Ukraine, is also making the market nervous."