Peter Crichton’s commentary for March 20, 2015

Unfortunately, demand tended to match the gloomy “eclipse” weather conditions on Friday morning in the east of England, with plenty of pigs about and less demand than we’d seen a week ago, not helped by relatively static EU mainland pigmeat prices.

Although the relentless fall of the SPP seems to have almost levelled out, only losing 0.08p to stand at 132.65p, spot buyers were far less bullish with quotes drifting back by 2p to 4p/kg in the main and 130p/kg now representing the top rather than a mid-range price.

The lacklustre European situation was further reflected by the cull sow market, where export abattoirs stood on, with most culls traded in the 58p to 60p/kg range – a miserably low price compared with their values in recent years. If I cast my mind back to the 1990s, I can remember selling cull sows in Bury St Edmunds Livestock Market for up to £360 each!

On the “glass half empty front”, another negative factor is that cull sows stood on despite an improvement in the value of the euro, which was up by 1.5% on last week trading on Friday worth 72.39p.

Weaner prices are also continuing to follow a slight downward track, with the latest AHDB 30kg ex-farm average quoted at £44.59/head and 7kg at £33.04/head.

As it costs approximately £20 to rear a piglet from 7kg to 30kg, weaner producers are probably losing out all round at current levels, and prices are also reflecting finishers’ lack of confidence in pig price values in the weeks and months ahead. This view is, to some extent, supported by one of the major buyers suggesting that the SPP would be unlikely to rise much above 140p for the remainder of 2015, but it would need to increase by at least 7.5p on its current level to achieve this.

There’s still much comment over the wide gap between “real” pig prices and the weekly announced prices, and although one abattoir (you know who you are) was finally persuaded to put 2p into their weekly price to stand at 122p, this and other weekly announced prices are still well adrift of spot and SPP values, which has put hard-pressed finishers’ cashflows under yet more pressure at a time when most operating with negative margins.

However, feed prices continue to work in pig producers’ favour, with the latest Farmers Weekly ex-feed wheat spot quoted at £115.30/t, but comments are being received that it’s impossible to buy at under £120/t, so this figure needs to be treated with a certain amount of caution.

The grain futures market ended the week with LIFFE feed wheat traded for March at £121.55/t and May at £124/t, but January 2016 is showing a slightly easier trend slipping to £132.90/t.

Proteins were trading at slightly firmer levels, with Brazilian soya ex-store Liverpool traded at £349/t, up £3/t on the previous week, and UK rape meal also showing a firmer trend trading at £181/t.

And finally, those of us who deal with what used to be known as SPS Entitlements were greeted with the news today that the RPA seems to have finally admitted defeat as far as the operation of its new online application procedure is concerned, on the basis that its “computer said no”.

As a result applicants will now resort to a paper application system for the time being, which has worked perfectly well in the past, although I suppose that the RPA has decided to work on the basis of “if it ain’t broke, break it”. At least there’s a further month’s breathing space until June 15 for claims to be submitted; assuming, of course, that everything is up and working by then!

> 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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