After an exceptionally high year for global pig meat prices over 2014, the average price of pork stayed low in 2015, as the four major pork exporters – the EU, the US, Canada and Brazil – recorded a drop in value.
The average price of pork on the international market finished at $2.38/kg, according to a global pig meat pricing report from AHDB Pork. This, the UK levy board says, is the lowest price in over eight years. It is over half a dollar per kilogram less than the price at the same point in 2014, and more than a dollar less than when global pork prices peaked in June 2014.
The report highlighted a range of factors that have created what can be described as a perfect storm scenario for global pork prices.
Russia’s long-running ban on European pork has had a debilitating impact on the European market. Supply continues to outstrip demand and the closure of this once-key market has heaped pressure on the prices of EU, US and Canadian pork.
AHDB Pork said prices in Europe had started to exhibit signs of stabilisation during the first months of 2016, helped by the temporarily-implemented private storage aid. But despite the faint signs of recovery, pork prices in Europe remain at a 12-year low.
US prices, too, have fallen dramatically in 2015. The strong US dollar has forced prices down in order for pork to remain competitive on the global stage. Supply in the US continues to increase after producers grew production in the wake of the porcine epidemic diarrhoea virus (PEDv) in 2014, and with a pork surplus, prices have remained low.
Brazil was also affected by its currency. The weakening of the Brazilian real against the US dollar sent pork prices tumbling in Brazil. The weak real did help export volumes of pork to a range of markets that did not use the dollar, but prices elsewhere damaged the value of Brazilian pork exports.
AHDB Pork said it was likely that pig prices would remain low and under pressure for the short-term future, and did not put a timeframe on the market’s continued depreciation.