Peter Crichton’s commentary for January 31, 2014

The recent announcement that Russia has banned the imports of any EU pigmeat following an outbreak of African swine fever in Lithuania has cast something of a shadow over the market, despite a slightly firmer DAPP which (for technical reasons) rose by 0.6p to 167.89p, but will probably show a easier trend next week.

Spot buyers were extremely cautious; not only because of the Russian situation, but also due to relatively poor retail demand, which is often the case in the first two months of the New Year.

As a result, spot bacon was traded at about the 160p/kg mark with some buyers offering less than this, but not too many takers and contract space has also been tight.

Despite a falling euro which closed the week worth 82.07p compared with 82.96p seven days earlier, sow prices stood on with most quotes around the 100p/kg mark, but some reports were emerging that if the Russian trade ban remains in place this could also adversely affect cull sow values soon.

30kg weaner values have remained firm with the latest AHDB 30kg ex-farm weaner average quoted at £56.38/head, but the value of 7kg weaners has eased to £41.85/head. However, weaner prices continue to show significant variations according to load size and the quality of the pigs, as well as their Farm Assurance status.

On a more positive note feed prices are also continuing to paint a slightly brighter picture for producers with ex-farm wheat traded at £149.50/t and futures quotes for May on the LIFFE market of about £150.15/t; July at £153.25/t; and November is looking much more reasonable at £143/t.

There are also savings to be made on the protein markets with Hi-pro Soya currently quoted at between £369/t and £372/t.

Recent confirmation that the DAPP will continue in its existing form was welcomed by producers far and wide because, like virtually every other sector in the farming world, accurate average prices are needed for crops and livestock. If producers and/or processors choose to include a DAPP element in their pricing arrangements, this is simply up to them, but the most important thing is that the DAPP is based upon a representative sample from all the major players with no black holes.

And finally, if Russia can be persuaded that due to the nature of our island location there is very little risk of a pig with African swine fever swimming from Lithuania to Skegness, perhaps a derogation could be made as far as importing UK pigmeat to Russia is concerned?

Unfortunately, Danish pigmeat exports to Russia for the first nine months of 2013 were more than 40% higher than they were in 2012, and if the Russians continue to say “Nyet”, some of that product could soon be heading this way.

> 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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