Peter Crichton’s commentary for April 15, 2016

Although the SPP put on a modest 0.31p and now stands at 112.86p, prices are still 15p to 20p/kg adrift of breakeven levels for most producers.

After several weeks of recovery, spot bacon pig prices appear to have levelled this week, with most bids in or around 110p/kg. Weekly contribution contract prices have also remained at slightly firmer levels with two buyers lifting their prices by 1p/kg.

Modest falls in the value of the euro, which traded on Friday afternoon worth 79.71p compared with 80.7p, has done nothing to help as far as pigmeat import / exports are concerned, with the result that cull sow quotes have been at around the 60p/kg level. This also reflects no real variations in the current low levels of European pigmeat values nor any further signs of lifting the EU ban of food imports to Russia imposed by Comrade Putin.

Although Easter is now well behind us, the next Bank Holiday is a little more than two weeks away, and producers need to pull numbers forward to try and avoid having too many spot pigs during a “short week”.

Weaner prices continue to reflect the financial pressures being faced by pig producers at all levels, and although the latest AHDB 30kg ex-farm weaner quote has improved by £2/head and now stands at £37.93/head, 7kg prices have not reflected this trend and remain at virtually stand-on levels, with an ex-farm average of £28.53/head.

A glance at the calendar reveals that 30kg weaners should reach bacon weight sometime in early July, which, as we all know, can be something of a tricky time for finished pig prices until the autumn. But 7kg pigs might be facing a slightly better future as these will not come onto the market until the autumn.

One positive point is that recent forecasts for global stocks of wheat, maize and soya bean at the end of 2015/early 2016 have all increased according to the latest USDA estimates. This news is reflected by a relatively static futures market with May feed wheat quoted at £103.50/t and November trading at £117.05/t. UK spot wheat is unchanged on an ex farm basis at about £101.10/t.

Probably the best news for UK pig producers is the growth in the percentage of British pork that has been reflected by Aldi and Lidl sourcing 100% fresh British pork, coupled with the recent Asda announcement that within the next 12 months 80% of its fresh pork will be British.

However, better uptake will be needed to mop up the extra 2.4% of clean pig slaughterings in March 2016 at 920,000 head.

Successful advertising and promotional activities are the key to maintaining demand for British pork, and the recent news that the industry’s Pulled Pork campaign is shortlisted for the annual Marketing Week Awards confirms the success of the campaign by AHDB pork marketing chief Kirsty Walker and her colleagues.

This puts the AHDB team up with the big hitters including Marks & Spencer and Carlsberg, who have also been shortlisted, and the results of the advertising “Oscars” award are due to be announced on the May 12 . . . come on “Great Britain”!

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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