Peter Crichton’s commentary for June 10, 2016

The SPP rose by a fairly significant 1.94p and now stands at 119.43p, but still has significant progress to make before it can match current spot bacon quotes which are in the 125p region and weekly announced prices have remained at either similar levels or gone up by an odd copper and most are now between 120p and 123p.

The recent spell of good weather has stimulated barbecue demand, although the forecast for the weekend and early next week is less balmy, with outbreaks of rain forecast in some regions. Hopefully none will affect any of our ‘local’ teams, including England, Wales, Republic of Ireland and Northern Ireland competing in Euro 2016.

Some of the progeny pigs from herds slaughtered out late last year or early in 2016 are starting to dry up and signs are emerging of a further shortage of UK live pigs in the supply chain as these earlier herd cullings start to take effect. If the same situation is repeated across mainland Europe, we could see a significant undersupply of pigs facing us as we move into the autumn period when demand generally improves.

EU mainland pigmeat prices are, however, being underwritten by firm demand for pork products in China and this market could prove to be the white knight that the industry has been looking for for so long.

Cull sow prices generally moved up by 1p, mainly due to an improvement in the value of the euro, which traded on Friday worth 78.68p, rather than due to any better demand from across the water, with EU export culls worth 62-65p in the main.

Weaner quotes still remain in a slightly ‘hungover’ state, with no major swing back to confidence yet as far as finishers are concerned, indicated by the latest AHDB 30kg ex-farm average which has remained almost static at £39.42. The same trend applies to 7kg piglets, which averaged £29.80/head, but with a pig shortage on the horizon, some of those buyers out there who’ve been looking to ‘nick’ a cheap spot load may be disappointed.

The cereal markets have ended another relatively quiet week slightly higher with the latest ex-farm UK feed wheat price averaging £105.40/t. On the back of slightly firmer oil prices, global wheat values are tending firmer, with July closing at £112.50/t and January 2017 £126.15/t.

With harvest now underway in the US, early crop conditions are reported to be good, with maize and soya beans ahead of their condition last year. All of this may help to keep a lid on further rises in protein values which have already risen sharply in recent months and are continuing to put livestock producers under price pressure.

And finally, only 13 days to go before we know the Brexit result, but it’s still difficult to gauge what effect that this may have upon the value of UK pigmeat if we go or if we stay.

If it’s a case of “if it ain’t broke, don’t fix it” the popular feeling is that pig producers will be better off under the existing EU umbrella rather than being left out in the rain on their own. And bearing in mind the challenges all livestock producers faced during foot and mouth, export markets remain a vital part of the whole pigmeat production system in the UK and will hopefully stay that way, warts and all!

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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