Peter Crichton’s commentary for December 5, 2014

As expected, it was another difficult day for sellers, with the SPP still drifting downwards and now standing at 145.53p. Spot bacon prices are still about 20p below this in some cases, but with relatively limited numbers of pigs traded on a spot basis, further price falls were recorded with an extra copper or two available in some places.

Comrade Putin’s mainland EU pigmeat import embargo is continuing to put downward pressure on European mainland pigmeat values, not to mention rising stocks in cold stores, but retail demand is still failing to match higher supplies.

As a result, significant volumes of EU pigmeat are heading this way at bargain basement prices, in the region of 125-130p/kg, head off, feet off, on a delivered basis.

The situation has not been helped by a slight easing in the value of the euro, which traded on Friday at 78.88p compared with 79.57p a week ago.

The slump in European pigmeat prices is highlighted by the crash in cull sow values, which are always a ready barometer of the health (or otherwise) of the pigmeat supply chain. UK cull sow export abattoirs were quoting prices in the 70p/kg region which represented a fall of 8-10p compared with last week. At these prices, many cull sows are now failing to average £100/head and some producers may well be tempted to retain these for an extra cycle because of the wide price gap between cull sow returns and replacement gilts. Not a route I would recommend, but sometimes necessity is the mother of invention.

Weaner values are also continuing to reflect the general malaise as far as finished pig prices are concerned and although the latest AHDB 30kg ex-farm average of £48.10 is only marginally lower than last week, 7kg prices have taken another sharp downwards step from £35.20 to £33.29.

As with finished pigs, there’s a world of difference between contract and spot quotes, with the latter anywhere between £2 and £4 lower, and sellers should also bear in mind a significant proportion (but I’m not quite sure how many) of the pigs in both samples are Freedom Food accredited.

Grain prices have endured something of a rollercoaster week, but still with an upward tilt, with spot wheat values reported in the Farmers Weekly of £128.20/t compared with £124.70 a week before.

LIFFE futures prices are indicating January 2015 feed wheat quotes of £130/t, but July has nudged ahead to £135.05/t.

Protein prices were showing slightly easier trends with HiPro soya ex-East coast ports down £10/t at £340/t but with inclement weather fears continuing to threaten Brazil’s current soya bean crop, reduced production levels could put the bulls back into this particular market.

And finally, a chance for outdoor pig producers to meet up in crisp winter sunshine tomorrow (December 6) at my 1,300 lot auction of outdoor pig equipment at Stamper Farms 1,100 sow herd, which is the largest sale of its type I have conducted for many years.

For those of you with wives and girlfriends looking for a “weekend away”, why not come to the sale and spend a never-to-be-forgotten night at Thetford Travel Lodge!

> 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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