Peter Crichton’s commentary for August 30, 2013

It was another exciting day for sellers and there were further developments on the shout price front with Karro also electing to no longer issue a weekly price.

Tulip moved its base price up a significant 5p, which now stands at 168p, and Gills added a further penny to 170p.

The DAPP eased a touch this week and now stands at 167.72p, but once the impact of higher shout prices and increased spot values filters through in the next couple of weeks we should see the DAPP move ahead.

Other former shout-price contracts are now in the process of negotiation and it looks as though a pattern is emerging that will include a weekly spot element and the DAPP, plus perhaps a factory price; and although some producers are talking about a COP element, there’s very little evidence that these are being incorporated on a widespread basis.

Spot bacon prices, however, continue to improve due to a significant shortage of UK pigs with numbers light throughout the system, but with the holiday period almost over and normal working returning next week, demand could improve.

Most spot bacon was traded in the 173-176p/kg region, with lighter weights also hard to find and earning premiums of 6-8p/kg.

Despite recent falls in the value of the euro, which traded on Friday worth 85.35p compared with 85.96p a week earlier, sow prices continued to improve to near record highs, with most quotes now in the 130-134p/kg region according to spec.

Weaner prices are also continuing to move ahead, albeit at a relatively slow rate, with the latest AHDB 30kg ex-farm weaner average now standing at £53.66/head, but with some finishers still preoccupied with harvest and straw carting, we could see more activity in this sector in the weeks ahead, especially if finished pig values remain firm.

With harvest well over half way, and better yields than anticipated being reported, the European Commission are reporting the largest combined wheat, barley and maize crop since 2008, which may help to keep prices under contro. Outside factors can soon change this, and feed wheat is currently trading ex-farm at £152.50/t compared with £145.00/t a week ago.

Futures prices are also indicating forward wheat quotes of £157.70/t for November and £164.00/t next May.

Soya, however, remains relatively expensive and many of the benefits of cheaper feed ingredients have yet to filter through the system, although the trend is certainly in the producer’s favour.

> Suffolk-based Peter Crichton is an auctioneer 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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