Although the cull sow market continues in freefall, signs are starting to emerge that UK finished pig prices may be at or near the bottom in price terms, with most spot quotes at stand-on levels and one or two late phone calls asking about availability for additional pigs next week, albeit at a fairly low price.
Marketing groups and producers have heeded the warnings about pulling pigs forward with the result that, as things stand at present, there are very few signs of the normal “Christmas rollover” that can play havoc with pig weights and grades through into January and beyond.
Weekly contribution prices (formerly shout prices) have also tended to hold at last week’s levels between 132p and 137p compared to the latest SPP, which now stands at 144.65p, which only just matches the 144p 2014 third quarter COP published by BPEX (before deductions).
In round terms, this means that a contract made up of, say, two thirds SPP and one third weekly price might work out in the 140-142p/kg range, plus premiums where appropriate.
Some of the smaller fresh meat wholesalers were reporting slightly better demand with the result that lighter cutters, especially if they were gilts only, achieving significant premiums of 6-8p/kg above contract bacon rates.
However, the bad news continues as far as sow values are concerned, with Comrade Putin’s ongoing embargo doing its worst as far as the whole of the EU mainland meat industry is concerned. There are reports of some limited imports finding odd chinks in the Iron Curtain and trickling their way through, perhaps in some cases through the back door.
The drop in sow prices came despite a slight recovery of the euro, which increased from 78.88p to 79.28p over the week.
However, European sow abattoirs are reporting bulging cold stores and very few options other than to keep dropping the price to try and stimulate demand with the result that another 5p was sliced off the price, which now means that cull sows are trading in the 63-66p/kg range, but it takes a good sow to be worth more than £100.
Breeding companies please note that some producers will be looking for breeding gilts prices to be discounted as at the moment the current exchange rate is in the region of 1.5 cull sows to buy 1.0 replacement gilt.
Weaner values continue to reflect a falling SPP and other index prices, as well as finishers’ concerns over finished pig prices in the months ahead, with the result that the latest AHDB 30kg ex-farm weaner average has slipped to £46.68/head and 7kg are averaging £34.47/head.
But as with the finished pig market, there’s a huge gap between contract and spot prices, and also significant variations between Freedom Food and Red Tractor, all of which have to be taken into account, and there are reports of 7kg Red Tractor spot piglets trading well under the £30/head mark, which is way below their COP.
One possible glimmer of light has also appeared on the feed market where spot wheat eased this week by £3/t and is now quoted in the Farmers Weekly at £125.40/t ex-farm. Futures prices are also tending to hold at similar levels, with January quoted on the LIFFE market at £130.25/t, but May ahead of this at £132.15/t.
Protein prices are also showing marginally easier trends, with hi-pro soya ex-store East Coast for December at £337/t, down £3/t from the previous week.
And finally, key changes are being made to EU food labelling rules that come into force on Sunday. In simple terms, this will require the mandatory details of the country of origin labelling for fresh pork. Although these rules have yet to be extended to processed pork products, it’s a step in the right direction and will provide details of the origin of fresh meat rather than simply referring to the country of processing.
It’s a long-awaited Christmas present for the industry; let’s hope it does something to help on the price front.
> 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