Chinese Torture

Although UK pig prices have remained at similar levels with the SPP only moving up a fraction to stand at 152.8p, on the other side of the channel a different picture is continuing to emerge with further increases in the influential German producer price which gained another seven cents this week on top of the four cent increase seven days ago.

This means that the German price of €1.85 has risen by 6.3% over the past seven days compared with the SPP, which has hardly moved, up by a mere .002% over the same period – the Germans must be considerably better at selling their meat than we are.

Despite the recent rises recorded in the EU pig meat value and the huge “black hole” that is reported to have emerged in the Chinese pig herd that up to 40% of their output may be lost to the ravages of ASF, most weekly contribution prices have tended to stand on and remain within the 143-150p range, rather than following the upward trend seen elsewhere.

Spot demand remains relatively quiet and there is no doubt that the UK red meat market is suffering from a drop in demand rather than slaughter numbers which is a worry for producers looking ahead, unless all of the benefits of the Chinese situation filter through to our industry. Spot bacon tended to be traded in and around 150p/kg but in this sector, there seem to be more sellers than buyers.

Cull sow prices have always been a useful indicator of EU pig meat values and were also helped by a stronger euro which traded 1% up on the week at 92.55p, together with a surge in demand throughout much of Europe confirmed by UK cull sow exporters, lifting their bids by 7p/kg (£10 per sow) with most quotes between 107-114p/kg, but it is difficult to gauge what the cull sow trade will be like after October 31, assuming a “no deal” situation is the outcome.

Weaner prices have improved as far as 7kg piglets are concerned, with the latest AHDB average price rising by £1.10/head to £39.80 whereas demand for 30kg weaners is more selective, but those that were on offer tended to be traded in the £50-£54/head range according to farm assurance status and numbers available, but a distinct easing off of enquiries for RSPCA Assured pigs is a worrying sign as this market looks to be somewhat overdone at present.

Grain prices are continuing to work in the producer’s favour, with the latest ex-farm feed wheat spot average quoted at £130.70/t, with September futures wheat prices at £143/t and barley at £131/t.

Protein values have eased a shade with Hipro soya quoted at £306/t for September-October and £312/t for November-April 2020.

With harvest in full swing and plenty of straw available prices in this sector have eased back significantly from their dizzy heights a year ago with merchants currently offering ex- farm prices of £35-£40/t for wheat straw and £10 more than this for barley.

And finally, it is difficult to ignore the Chinese situation bearing in mind that they “used to” have the largest pig herd in the world and reports are now indicating that this is down by 40% year on year, with losses in some regions in the 40- 60% bracket and more new cases are continuing to be reported.

ASF is also spreading to other neighbouring countries, including Cambodia, Laos, North Korea and Vietnam not to mention swine fever problems closer to home, with reports in Belgium as well as other former Eastern Bloc countries. EU fresh and frozen pork exports to China rose by almost 90% over the past 12 months to May and values have trebled in some cases.

Producers are, therefore, claiming there are many more opportunities for UK meat processors who should be reflecting the soaring price of pig meat on a global basis to a greater extent than currently, where little seems to have changed!

Get Our E-Newsletter - Pig World's best stories in your in-box twice a week
Will be used in accordance with our Privacy Policy
Share.

About The Author

Based in Suffolk, Peter Crichton provides a wide range of valuation, auction and livestock marketing services, as well as supplying the UK pig industry with a wide range of consultancy services covering tenancy, contract advice, pig equipment and herd valuations as well as dispute resolution. For more information visit: www.petercrichton.co.uk