Peter Crichton’s commentary for March 18, 2016

Unfortunately, signs that spot bacon prices were due for a revival proved to be somewhat wide of the mark with most spot bacon buyers having enough pigs booked in for the short week ahead and not feeling the need to go shopping for any more. So, a fairly wide range of prices between 100p to 110p/kg were available according to spec and demand.

The SPP, however, nudged ahead for the first time for a while putting on 0.25p and now stands (or lies) at 112.37p, but reports of some further cuts to weekly announced prices in the pipeline may put the lid on a much needed revival in UK pig prices.

The sow market was also in a slightly more bearish mood with cuts of 1p/kg, not helped by limited EU demand over the upcoming Easter Holiday, with most quotes in the 55p – 57p/kg range.

Despite a relatively strong euro, which traded on Friday worth 78p, this did little to help the sow price which is another negative factor, because cull sow values have always been a ready barometer of the health (or otherwise) of EU mainland pigmeat prices.

Demand for weaners remained subdued, with the latest AHDB 30kg ex-farm weaner average quoted at £36.54/head and the 7kg average a shade firmer at £29.36/head. But, once again, a wide gap remains between contract weaners and one-off loads of spot pigs.

The grain market ended another quiet week with little variation on the price front, and spot ex-farm wheat was quoted at £98.80/t and futures prices on the LIFFE exchange included March at £100.80/t, May at £103/t and July at £104.20/t.

And finally, still a mixture of good news / bad news on the pigmeat supply and demand balance.  Although the NPA is reporting forecasts of a slow reduction in the size of the EU mainland herd, this may be a case of too little too late for hard-pressed UK pig producers, who’re virtually all operating in the red and estimated to be losing an average of £10 per bacon pig produced.

To rub salt in the wound, UK pig slaughterings for February were 7.5% higher than 12 months earlier and pigmeat tonnages were up by 9.1% over the same period. So, for the foreseeable future, it looks as though supply will continue to win the race against demand to the detriment of the industry as a whole.

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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