Money Talks

Very much a case of “as you were” as far as pig prices are concerned with the SPP virtually unchanged at 162.31p and the influential German producer price also standing on at €1.82, equivalent to 153.4p in real money.

Weekly contribution prices have generally remained at similar levels, at a fairly wide range of between a rather miserly 155p and a slightly more generous 163p, but the whole contribution price system is under the microscope and in school report terms “could do better”.

After a period in which contribution prices have been lagging behind equivalent spot and contract quotes, hopefully as they were slow to go up, they will also be slow to come down…we shall see.

Spot bacon prices have held at similar levels with most between 156p-160p and although some batches of contract pigs have been rolled, the supply and demand equation is more or less in balance at a time of year when pig prices can often hit a brick wall and at least we have February to look forward to when any financial losses are likely to be reduced because it is a shorter month!

Cull sow prices have eased by around 1p, mainly due to a fall in the value of the Euro which is now trading at 84.3p compared with 85.22p a week ago and most cull quotes have been in the 104p-110p range according to load size.

Weaner values have improved. with the latest AHDB 7kg ex-farm average rising in value by £1.23/pig to £42.49/pig.

There is still no AHDB average for 30kg pigs due to an insufficient sample, but most are reported to be trading in the £55-£58 region.

Futures grain and protein prices are continuing to move ahead in the commodity markets, with the latest feed wheat February ’20 price quoted at £161/t and September ’20 at £170/t.

Barley deals have been agreed at £135/t for February ’20 and £145.20 for September ’20.

Hipro soya prices are holding virtually unchanged, with February-April ’20 traded at £302/t and November-April ’21 at £301.80.

And finally, there have recently been significant concern amongst leading producers over the wide gap which has opened up between weekly contribution prices and current pig meat values where in some cases, contribution prices have been as much as 8p adrift when compared with other contract and spot quotes, although the gap now appears to be narrowing.

For those of you with longer memories, contribution prices took over from the unpopular shout prices and were designed to include a “market price” flexible element in the overall SPP matrix-based contract pricing systems used by contract abattoirs.

Although most producers will require a pig price which delivers “as much as possible” the problem is designing a system with a flexible but fair pricing methodology that sits happily with buyers and sellers and various options are now under consideration.

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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