Peter Crichton’s commentary for April 22, 2016

Although the SPP only crept up by 0.4p to stand at 113.26p, representing a drop of 19p/kg during the past 12 months, equivalent to £15 for a bacon pig, further signs are starting to emerge of a slight recovery in UK pig values, but we’re still much closer to the centre of the wood than out of it!

Despite the upcoming short week, there were no reports of any significant numbers of pigs being rolled, and spot bacon buyers were quietly shopping for a few extra numbers in places, with the result that most one-off spot loads were trading in the 110-112p range, according to spec.

This makes some of the weekly announced factory prices, as low as 108p, in some cases looking very much out of step with the current market, and hopefully some of the larger operators can be persuaded that their future weekly announced prices bear a closer resemblance to actual values, because it’s virtually impossible to buy any spot pigs at less than 110p.

A slight improvement in the value of the pound has, unfortunately, pushed the euro down, which does nothing to help on the import/export front, trading on Friday worth 78.02p compared with 79.71p a week earlier.

As a result, although cull sow values in Europe have remained at similar levels, UK exporters were bidding 1p less in some cases, with most quotes between 58-60p/kg – still providing a fairly paltry return for those looking to replace worn out sows with breeding gilts or leaving the industry.

Although signs are definitely emerging of a shortage of finished pigs in the system, this has yet to filter through to the weaner market, where the latest AHDB 30kg ex-farm weaner average dropped by a little more than £2/head to average £35.67, although 7kg weaners, which might face a slightly better future, firmed a shade and rose from £28.53 to £28.99. But once again, a wide gap remains between spot and contract weaner quotes, underlying the need to have a cast iron contract locked away in a safe place during these tough times.

Grain prices saw a mini rally during the week, although by Friday, some of this had, to the relief of pig producers, been eroded with the latest Farmers Weekly spot feed wheat price marginally firmer at £103.20/t, but hard to buy much at this level, and futures quotes ended the week on a slightly easier note with May 2016 traded at £106.50/t and November 2016, £118.50/t.

Any spike in grain prices could start the alarm bells ringing, and pig producers are advised to keep a very close eye on the market as a whole because time spent in the office buying feed can often be far more worthwhile than mucking out pig pens!

And finally, it would be interesting to know pig producers’ opinions on the European Union referendum on June 23, and although the NFU has come out actively in support of remaining in the EU, with the lack of any clear information it seems to be there could well be a significant number of “don’t knows” sitting on the fence. But surely it would be better for the UK to be a member of a 500 million community with a small say than in a 65 million population with no say at all!

And finally finally, nervous times for those out there approaching three score years and 10 following the high mortality in the entertainment sector. With four candles followed by two soups and now one Prince all gone, some of us are now wondering how close the great weighbridge in the sky might be?

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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