Peter Crichton’s commentary for February 20, 2015

There were a few slight hopeful rays of watery, wintery sunshine on the pig front today, and although the SPP continues its decline and has now dropped to 135.06p, because of the scarcity of spot pigs (which is hardly surprising when you have a look at the difference in values between spot and contract), one or two spot buyers were looking for pigs rather than leaving their phones off the hook, with the result that spot bacon was traded in some cases around the 112p to 115p mark.

Unfortunately, however, the SPP, as well as other index prices, are likely to continue to decline and the first upward momentum should, in theory, come from the spot market.

Processors are, however, reporting slightly better retail demand, with legs a little firmer, although shoulders remain hard to shift.

Evidence of slightly better EU pigmeat values continues to filter through, with sows up another penny, but if the currency had not gone in the wrong direction, this could easily have been plus 2p. Unfortunately, the euro has slipped again in value, trading on Friday worth 73.56p compared with 74.03p a week before, with the ongoing uncertainty over what remains of the Greek economy continuing to damage the value of the euro as a whole.

Cull sow quotes have now risen for the second week running, but are still miles behind where they should. Most were traded in the 62p to 64p bracket, compared with 98p a year ago.

A year-on-year comparison, however, reveals that the value of the euro alone has dropped by 11% during the past 12 months, and if the currency had stayed at last year’s value, cull sows on the currency differential alone would be worth more than 71p/kg.

The weaner market is also showing signs of a slight availability shortage, with fewer spot weaners on offer and the majority committed on a contract basis. Unfortunately for sellers, the latest AHBD weaner statistics show a 30kg ex-farm average of just £44.42/head and 7kg at £33.21/head. Any further revival in finished pig values, coupled with an ongoing shortage of weaners, could help to put a slight spike in this market, although in most cases, weaner producers still trading at below the cost of production.

Grain prices have had a quiet week with ex-farm wheat a shade firmer and quoted at £117.80/t, but futures prices have eased a shade with March wheat quoted on the LIFFE market at £120.65/t and July at £125/5.

Protein values are also moving in the right direction (for pig producers) with Hipro soya ex-East Coast ports quoted down £15/t to £315/t and rapemeal dropping £2/t to £187/t.

And finally, more worrying news that the feral pig population (like some children) is out of control. During the next two years, according to recent press reports, there could be an exponential population explosion, with up to 10,000 animals in the Forest of Dean region alone.

If this trend continues, it will be harder than ever to control disease outbreaks and we could be in the same sticky mess that Latvia, Lithuania and Poland find themselves in. Unfortunately, feral pigs are no respecters of fences or AML2 movement licences, and could cause havoc on the disease front, especially among our valuable outdoor herds that now comprise 40% of the overall UK breeding sow population.

> 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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