Peter Crichton’s commentary for April 10, 2015

It was a relatively quiet day as far as buyers and sellers of spot and contract bacon pigs were concerned, with the SPP marginally lower, easing 0.15p to 132.42p, and spot pig buyers generally operating in or near to stand-on mode.

As a result, most contract bacon prices remained at generally similar levels, and spot bacon was trading in the 128-130p/kg range in the main, with a slightly firmer enquiry from some of the fresh meat abattoirs, but nothing to write home about.

Cheaper foreign imports and carcase balance (or imbalance as one trader called it) are the two main challenges currently facing the industry, although it was refreshing that one of the major processors increased their weekly contribution price by 2p/kg, but others stood on.

All in all, UK pig prices still have a long way to go before they can emerge from the current gloom, especially in the light of suggestions from one of the major players that they could be looking to reduce the numbers of pigs handled in the months ahead because of fierce competition from imports coupled with a supermarket price war. All the big retailers are looking to maintain their margins, in many cases at their suppliers’ expense.

An increase in German pig prices this week by 5C was encouraging, coupled with cull sow prices generally rising by 2p/kg, despite an easing in the value of the euro, which traded at noon on Friday worth 72.4p, down from 73.43p a week ago.

As a result, cull sow quotes were generally in or around the 60p/kg level, but still represent a miserable return, especially for those producers looking to cull and replace ageing sow herds with, in many cases, one maiden gilt costing as much as the cull value of two sows – BOGOF in reverse.

Weaner prices have, however, improved a shade with the latest AHDB 30kg ex-farm weaner average quoted at £46.28/head and 7kg at £33.32/head, possibly helped by the fact that there seem to be fewer spot weaners available for sale at present. This might help stimulate a certain amount of demand, but most of the canny large-scale finishers are still keeping a wary eye on the finished pig and feed markets before they buy.

On the feed markets, futures prices have been showing a slightly easier trend, with LIFFE feed wheat traded at £118.85/t for May and £129/t for November.

Spot wheat is quoted in the Farmers Weekly on an ex-farm basis at £115.20/t, but it’s still hard to find many pig producers who’ve been able to buy at this level.

And finally good news that, after years of banging on about the subject, efforts are being made to improve pig industry biosecurity and possibly to counter the threat of ASF and PEDv due to new rules for lorry washing at abattoirs, which will soon be introduced as part of the British Meat Processors Associations pig health and welfare assurance package.

The NPA and Colin Stone have, in particular, long campaigned for improvements to lorry washing facilities at abattoirs.

The new rules, when finalised, are expected to require an adequate number of wash bays to allow effective cleaning and disinfection; lighting, so drivers can actually see what they are doing in the dark rather than using the torch on their mobile phone; frost protection of washing kit during cold weather to avoid lumpy water problems; barriers between washing bays to prevent cross contamination; as well as a whole host of other precautionary measures. But we’re still stuck with the problem that with some older abattoirs and on cramped sites, it’s impossible to find enough space to accommodate all of these requirements.

It is, however, counterproductive to suggest that abattoirs in this category should either close or not be supported by producers, because we need every single processor we can find!

> 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

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