Pig prices continue to plummet on the continent

Many continental pig producers, and especially the smaller ones, will be surveying their steadily growing unpaid bills this morning, and wondering whether they will be quitting pigs in 2016, states the National Pig Association

The situation on the continent has been described as "carnage" by one British analyst, as prices continue to nose-dive.

European Union pig reference prices show incomes plummeting compared with just a month ago.

• Netherlands down 14p.

• France down 12p.

• Spain down 11p.

• Germany down 7p.

• Denmark down 6p.

The United Kingdom reference price has fallen too, but by just 1p a kilo, so far.

Real life prices, as opposed to reference prices, show Netherlands and Denmark at circa 84p, and Spain, Germany and France at circa 88p.

Established commercial producers will weather the storm, as they've always done, but many smaller producers — and there are lots of them on the continent — will be quitting next year, unless prices start improving soon.

Even some Danish producers, currently said to be getting only £24 for weaners, might have to start thinking about their future in the pig industry.

But storage aid starts in January, and the Danes will be the main beneficiary by using it tactically as a de facto export refund — freezing down product for export, which they would have to do anyway, picking up the storage aid, and then withdrawing it from storage when they're ready to export.

Storage aid includes lard this time, so it's likely to play a positive part in stabilising prices, but some producers will be wondering if this just delays the inevitable.

• The European Union reference price is based on an E-grade carcase which is 55-59 percent lean meat, whereas in practice British pigs average over 60 percent — which means the reference price undervalues the price British producers are receiving.