Peter Crichton’s commentary for June 5, 2015

It was a slightly better day for sellers, although there’s still a long way to go before prices return to anywhere near their required levels. The stage was set by a modest improvement in the SPP, which has nudged up to 131.18p, coupled with a small rise in the value of the euro as well as reports of fewer UK pigs coming forward and a return to better weather to stimulate barbecue demand.

All of these factors remain fairly minor, but are helping to paint a slightly happier picture than previously, with the result that spot bacon traded ahead of 130p, with up to 132p available in places and weekly contract prices will also, in some cases, be firmer with Woodheads putting up its contribution price by 2p to 129p/kg.

However, for the glass-half-empty merchants, Wimbledon and strawberries won’t be far away, which often provides a trigger point for prices to come under pressure. Hopefully, on this occasion, this might to some extent be avoided.

Reports of firmer German finished pig prices, which rose by 3 cents, also provide a little more good news, and although cull sow prices also moved up by a penny, this was more due to an increase in the value of the euro which traded on Friday afternoon at 72.8p compared with 71.8p a week ago, with the result that most cull sow quotes are in the 55p/kg – 58p/kg range, but still a paltry return compared with their value of 94p a year ago.

Weaner values have, however, continued to suffer from the lack of profitability in the finishing sector with the latest AHDB 30kg ex-farm weaner price easing again to £43.28/head and 7kg to £33.16/head, and although some modest premiums were available for Freedom Food weaners, finishers are likely to remain cautious until a clearer picture emerges of the prospects of finished pig prices later on in the year as well as which way the feed market is likely to jump.

Recent reports from the grain markets are indicating slightly firmer prices with ex-farm spot feed wheat quoted at £111.20/t, although it’s still quite hard to buy at this level. Futures prices have also staged a significant recovery with July feed wheat quoted on the LIFFE exchange at £117.50/t and November at £127/t. As previously suggested, now might be the time for some producers to see if they can obtain partial cover just in case the market continues to move away from them.

And finally, producers would be well advised to back the measures being taken by the NPA to try and prevent any catastrophic exotic disease outbreak hitting these shores. The organisation is suggesting that pig keepers should sign up to a PEDv Charter, which is the same system that operates in East Anglia for dysentery.

The NPA is also pressing to make PEDv a notifiable disease, which would help to encourage producers to “come out” if their herds are infected and also to allow movement tracings and early detection of further spreads of this and other potentially costly diseases, not to mention the associated financial costs that affected producers would face in terms of loss of pigs and clean up expenditure. This NPA initiative comes on the back of further reports of swine fever outbreaks in Latvia, Poland and Lithuania, bringing the threat of CSF ever-closer to Western Europe.

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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