Peter Crichton’s commentary for April 2, 2015

Finished pig prices have remained virtually static today, despite the short week ahead, with the SPP almost unchanged at 132.57p and spot bacon buyers generally operating in the 128p to 130p/kg region, however demand was still described as “quiet”.

A return to more spring-like weather might help to stimulate demand, but the whole supply chain is continuing to suffer from cost cutting imports at a time when retailers are also looking to retain their margins while undercutting their competitors.

As a result, many producers are still selling pigs at a loss, with COP levels reported to be in the 135p to 140p/kg deadweight range, but most contract Red Tractor prices are lagging 4p to 6p/kg less than this in net terms.

The low value of the euro also remains a problem and traded on Friday little changed worth circa 73.43p compared with 82.5p a year ago, representing a value reduction of 11% as far as both pigmeat import and exports are concerned.

Low cull sow prices continue to prevail with quotes remaining in the 57p to 60p/kg stand-on levels compared with 100p/kg a year ago, representing a drop of 42% (£60/head for the average cull sow), but signs may be emerging of slightly better cull prices in the weeks ahead.

Weaner values continue to reflect finishers’ concerns over low finished pig values in the months ahead despite relatively low feed costs with the latest AHDB 30kg ex-farm weaner average quoted at £45.43/head and 7kg at £32.64/head.

On the feed price front, recent US data has delivered bearish news for grains as well as the prospect of another record US soya bean planted area and, as a result, LIFFE feed wheat was traded at £122/t for May and £131.40/t for November.

And finally, the news that many UK pig producers have been waiting for is that, with effect from Aprils Fools Day, fresh chilled and frozen meat must include labels to indicate the country in which the animal was raised and slaughtered, or if they are one and the same, the labels will state the origin country as “UK” or similar.

This should put a stop to imported meat that’s processed in the UK masquerading as “Suffolk pork”, but the labelling rules haven’t, unfortunately, been extended to include processed meats, but their origin must still be provided if the failure to do so might mislead a consumer as to the true origin of the product; such as ham reared in Denmark, but processed in the UK being passed off as “Yorkshire ham”.

> 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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