Peter Crichton’s commentary for May 20, 2016

It was another positive trading day, but more of a pause for breath on the landing than a rush to the bedroom, with the SPP putting on another 0.9p to stand at 115.6p and spot bacon retaining recent gains with most traded at or around 120p/kg, although the indifferent weather forecast for the next few days has to some extent cut back on orders, especially in the barbeque department.

Weekly announced contract bacon prices have also continued on their upward track, with rises of between 1p and 3p/kg and Woodheads at the top of this particular pile at 119p/kg, but it really depends on how the rest of the matrix is made up before one can compare average bid prices.

Demand remains very much weather related, and the forecast for next Bank Holiday weekend is indicating a warmer spell may be on the way, which could work wonders as far as alfresco eating is concerned, so we’ll keep our fingers crossed on this front, and I hope the forecast is more accurate than Michael Fish was in 1987!

But at least a number of the major abattoirs will be operating a full five-day week, which should avoid any pigs being “rolled” and weights creeping up.

One negative factor has been the recent improvement in the value of the sterlng due to indications that some pollsters are indicating that it’s more likely that the UK will remain within rather than outside the EU after the June 23 vote.

The downside is that this has hit the value of the euro, which traded on Friday afternoon worth 77.17p compared with 78.75p a week earlier. This 2% reduction in the value of the euro immediately filtered through to the cull sow market with bids back by 2p/kg and most culls traded in the 58p to 60p/kg range according to load size.

Unfortunately, this reduction in the value of the euro had also filtered through to imported pigmeat, which continues to undercut the UK market.

Weaner prices remain in roller-coaster mode with the latest AHDB 30kg ex-farm average slipping by just over £1.50/head to £36.96/head. But 7kg prices have held at £29.33/head.

However, with many weaner contracts tied to the SPP, prices should nudge ahead, providing the SPP travels in the same direction, but weaner producers are still trading in the red with prices at current levels and another £4 to £6/head is needed to be put into the pot to restore the balance.

Cereal prices have ended another fairly uneventful week with a slight increase in the value of UK spot wheat traded on an ex-farm basis averaging £103.19/t and futures prices have generally held at last week’s levels, with UK May feed wheat quoted on the LIFFE market at £106/t and November at £116.6/t.

One slightly negative note on the proteins front is concern about the size of the South American crop due to weather factors, with US soya bean futures rising for the sixth week in succession. But, this could be an incentive for US farmers to plant more soya beans next time round.

And finally, for those in the pig industry wondering whether to vote Yes or No on June 23, cast your minds back to the 2001 FMD outbreak when pig (and other livestock prices) crashed when exports to the EU were banned, and it will take a fairly convincing argument to support suggestions that the pig industry will be better off out of the EU . . . any views on this subject would be welcomed.

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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