Peter Crichton’s commentary for January 15, 2016

Despite large volumes of pigs being “pulled forward” before Christmas and the New Year, unfortunately there’s still a significant backlog of heavy pigs in the system. This was underlined by the latest SPP, which slipped another 2.88p to stand at 119.09p, with the average weight of the sample at an eye-watering 84.02kg deadweight, which is the highest ever recorded.

A long spell of remarkably mild and good growing weather, together with better production and productivity, have combined to create a significant over-supply of pigmeat throughout the system, not to mention stiff competition from imports, with Belgian carcases ex-head and feet reported to be available on a delivered basis as low as 110p/kg.

Hopefully, the current spell of cold weather should down pig growth rates and stimulate customers’ appetite levels.

There were wide variations in spot bacon quotes, with the lowest bids at 90p and others at up to 112p, with regular sellers generally able to receive prices towards the upper end of this range and those with one-off loads finding very few homes and lower prices.

German pig prices are also showing a slightly firmer trend with reported rises of 3 cents (2.3p), but little of this has yet filtered through to the UK market.

One shaft of sunlight has been the recent resurgence in the value of the euro, which bounced up another 3% this week to trade on Friday worth 76.63p. This is the main reason cull sow quotes also moved up by between 1.0 to 2.0p/kg, with most bids in the 52p to 54p bracket.

Weaner prices continue to suffer, and although the latest AHDB prices do not show much variation compared with last week, with the 30kg average quoted at £39.59/head and 7kg at £31.34/head, but spot prices for one-off weaner deals have been reported at much less money than this as supply continues to exceed demand and buyers remain extremely cautious over finished pig prices in the weeks ahead despite lower feed costs.

UK LIFFE feed wheat futures prices are continuing to display bearish trends, with January quoted at £108.25/t and May at £112.50/t, and the latest Farmers Weekly ex-farm feed wheat price now stands at £102.30/t, although it’s quite hard to buy much at this level.

Some protein prices are showing a slightly firmer trend with Chicago soya bean futures settling up on the week, but Paris rapeseed future prices closed down and global soya bean stocks are reported to be slightly lower than forecast, although ongoing Chinese stockmarket volatility may also help to keep a lid on any significant price rises, UK hi-pro soya meal was traded at £244/t for May delivery and UK rapemeal at £151/t ex-store.

And there’s more bad news in the shape of the latest NPA report that the farmers’ share of the retail price of has plummeted to less than 34%, which is its lowest level for 15 years. Although there are suggestions that some form of direct action might take place, following the fall of 19p/kg (13%) in December farm gate prices when compared with the previous December. Milk producers are in a similar loss-making situation, and the farming industry as a whole seems to be very much at the mercy of the price war that’s taking place between the major retailers.

And finally, those of us who are 69-years old will be wondering who is next following the sad demise of David Bowie and Alan Rickman in the past few days?

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About The Author

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