Peter Crichton’s commentary for February 6, 2015

It’s Friday 13th in a week’s time, but hopefully matters will be no worse than they have been today.

It was another very difficult day for sellers that saw the SPP continuing to lose ground and standing at 139.06p, but this bears no comparison with much lower spot quotes.

It’s important to emphasise, however, that there’s a wide difference between regular spot suppliers selling to outlets on a weekly basis and one off loads of bacon pigs looking for a home.

In the former case, sellers might expect to receive prices in the 113p – 118p/kg range, but for the latter 110p/kg proved to be the lowest base price for many years, although not many number of pigs were traded at this level.

Downward recalculation of some contract bacon prices will also feed into the SPP in the weeks ahead, and further significant falls are anticipated.

Although there are a multitude of different contract bacon prices out there if, for example, a 50/50 mix of SPP/weekly factory prices are used, contract bacon quotes work out somewhere in the 128p – 135p/kg range, which means that in many cases producers will now be banking less than 130p/kg, which is some 12p – 15p/kg less than BPEX COP estimates.

On a very slightly more positive note, there are reports of German and some other European prices putting on a couple of euro cents, although cull sow values remain at bargain basement levels in 56p – 59p/kg range.

Unfortunately the euro has had another lacklustre week, trading on Friday worth just 74.3p compared with 75.2p a week ago, meaning that foreign pigmeat imports are even cheaper than they were and putting further downward pressure on cull sow prices.

Bad news from the finishing shed is continuing to filter through to the weaner department with the latest ADHB 30kg ex farm average slipping to £44.60/head and 7kg to £33.79/head.

Spot feed wheat quotes have remained at similar levels of about £118/t ex-farm mark, but the news that producers don’t want to hear is that futures feed wheat quotes are starting to nudge ahead, with March quoted at £123.65/t and May up to £126/t, with reports that US wheat values may be slightly firmer due to Artic weather conditions on the US Plains.

Protein meals have also shown a slightly more bullish trend with Hi-pro soya meal quoted at £330/t ex-East Coast stores, which is £10/t firmer than its mid-January price.

And finally, to rub salt into the wounds that many British pig farmers are currently licking, reports are emerging that Brussels have failed to take appropriate action against those EU countries who have still not fully implemented the 2013 partial stalls ban. This comes at a time when British pig farmers’ margins are under even more pressure and they can’t be expected to carry the associated higher welfare costs while the market is being undercut by imports that don’t even meet the EU’s basic welfare requirements – some things never change!

> 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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