Peter Crichton’s commentary for July 11, 2014

Demand matched the East Anglian weather on Friday – slightly chilly and dull.

Reports of sharp falls in European mainland pig prices did nothing to help on this side of the Channel with the DAPP losing a penny, standing at 162.87p; as a result, most contract-based prices moved down in line with this.

A mixture of enough pigs in the system, as well as relatively indifferent retail demand and no sign of the return of barbecue weather, have all contrived to create something of a buyers’ market, with spot quotes around the 164p mark, not helped by a relatively weak euro, which traded on Friday worth 79.51p.

Falls in cull sow values were much sharper than for finished pigs due to surplus of pigmeat in mainland Europe cold stores, while the Russian pigmeat import ban remains in place. As a result, cull sow quotes were 6p down on the week with most culls now trading in the 90-92p range according to spec. A glance back at values last September reveals that cull prices have now fallen by about 35p/kg, which is equivalent to £50/head and creates another dent in profit margins, despite the recent boost received from falling feed prices.

Weaner values have also lost their recent momentum, with the AHDB 30kg ex-farm average at £56.65 with 7kg pigs dropping by almost £1/head to £40.31.

The recent slowdown in finished pig growth rates and reduced slaughtering levels has put something of a backlog into the supply chain, with the result that weaner space remains tight, which is another reason why spot weaner sellers are finding it much harder to place supplies than they were a few weeks ago. But with feed prices at their current levels, weaners appear to be a reasonably good bet for buyers in horse racing terms.

Cereal prices are continuing to suffer from bearish influences with November wheat quoted at £132/t on the LIFFE futures market and January £134.25/t.

Old-crop ex-farm feed wheat is now trading at £132.50/t.

Sustained grain price declines have occurred due to the bearish influence of last week’s USDA quarterly stocks and acreage reports, and favourable growing conditions. Although the harvest has yet to get into full swing in the UK, some small areas of winter barley have been nibbled at, with reports of good yields and plenty of straw, which should help to put a spring in the step of most pig farmers, providing they’re not also involved in the arable sector.

And finally, for those of you who are wondering how my Salisbury sale of 1,000 sows’ worth of outdoor kit went, please look on my website (see below); click on “Auctions” and then “Sale Reports”. And just to whet your appetite, we’ve another sale of outdoor kit in the Salisbury area on September 13.

> 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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