Peter Crichton’s commentary for May 30, 2014

With the DAPP only up a fraction, rising by 0.06p to 164.29p, contract prices are likely to remain at very similar levels, as most of these are tied to the DAPP or its derivatives.

The stand-on situation was also reflected in the bacon market although, on a positive note, supplies still seem to be slightly on the tight side, and as a result there were very few reports of pigs being rolled and most spot bacon was traded within a fairly narrow 165-168p/kg range.

The cull sow market, however, continues to cast something of a shadow over the industry with prices standing on, yet again, and most export abattoir bids were in the 90p region, compared with more than 100p this time last year. But the Euro was worth 85.5p then, compared with its trading level today of 81.33p, which means that on a currency basis alone, our sows have dropped in value by about 5%.

Sluggish European mainland cull sow values are largely blamed upon the ongoing Russian import ban on EU produced pigmeat due to the recent African swine fever outbreaks in Lithuania and Poland. However, some commentators see the Russian ban as being more politically than pig-health motivated, but it has certainly put a lot of pressure on the market with large stocks building up in cold stores because Russia was previously a major importer of cull sow products.

The weaner market has also remained at fairly similar levels with the latest AHDB 30kg ex-farm average improving slightly to £56.53/head and 7kg weaners trading at £41.07.

Feed prices are continuing to look reasonably encouraging for pig producers (but not for arable farmers) with further falls on the futures markets this week and July feed wheat quoted on the LIFFE market at £146/t and November easing to £143.55/t.

The old formula that the price of pigs in pence per kg deadweight should be ahead of the equivalent value of corn on a pounds-per-tonne basis seems to be working in our favour at present, and long may it continue, but a significant period of profitability is need to allow the industry to reinvest in worn-out facilities that had not, in many cases, seen much in the way of maintenance or a paint brush for many years.

And finally, in light of last week’s dysentery outbreak, the need for much better washing-out facilities at some abattoirs remains an absolute priority that should form part of the Farm Assurance and BQAP accreditation that abattoirs are required to meet. Although there’s no proof that the recent outbreak in Suffolk was traced back to an abattoir, washing facilities at many plants are seen as a weak link in the supply chain and require urgent attention.

Peter Mortimer, who is the Suffolk-based producer affected, has just seen the breeding herd he had lovingly developed over the past 26 years head for slaughter, and is to be congratulated for “coming out” and letting the industry know of his dysentery problem – rather than seeking to medicate his way out of the situation, posing further risk to his pig-keeping neighbours – at great personal and financial cost.

Those producers who, however, decide to stay silent on the subject and medicate their way out of it, should be brought to book because of the ongoing risk they pose to the industry as a whole, despite the fact that dysentery is not a notifiable disease.

> 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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