Peter Crichton’s commentary for November 13, 2015

It was Friday the 13th in every sense, and unlucky for pig farmers in general, with the SPP continuing to slide losing a further 0.86p to stand at 126.25p, and spot quotes also heading south with retail demand reported to be quiet and as a result spot buyers were few and far between. If they had space, prices were generally in the 120p to 123p/kg range, although regular sellers could command 2p to 4p/kg ahead of this.

Contract prices linked to the SPP or other index prices are also now in some cases well below 130p/kg for Red Tractor, and the Freedom Food premium continues to be eroded due to reduced demand at the top end of the market.

Cheaper imported pigmeat is also posing quite a challenge on the price front, with reports of Spanish legs as low as £2/kg. It’s hardly surprising that some of the major players in the catering and retail sector are finding foreign pigmeat irresistible pricewise.

The value of the euro has also continued to slip, trading on Friday afternoon worth 70.7p compared with 71.36p a week ago. This means that imported pigmeat was a little more than 1% cheaper causing equivalent damage to the value of our pigmeat exports, which mainly comprise cull sows.

Partly as a result of the currency changes, export prices fell another 3p/kg with most culls traded in the 54p to 56p/kg range, but some UK farmers are getting significantly less for their sows than some of their European counterparts.

As expected, weaner prices are continuing to reflect the indifferent outlook for finished pig values in the months ahead, with the latest AHDB 30kg ex-farm weaner average slipping to £42.33/head and 7kg weaners down by £1/head to £31.45/head. But with better than average productivity, there are currently more weaners looking for homes than space available, so if any of you want to buy “cheap” 7kg or 30kg weaners, I have plenty available.

Probably the only shaft of sunlight a far as pig producers are concerned was to be found in the grain markets, where prices remain under pressure due to very high carryover stocks. The latest spot feed wheat ex-farm price is quoted at £104.40/t, although it’s quite hard to buy much at this level.

LIFFE futures market prices have remained generally unchanged after a quiet week, with November 2015 trading at £112.90/t and March 2016 at £118/t longer months are looking more expensive with January 2017 quoted at £130.15/t, but Hi-pro soya also traded easier by £2 to £3/t at £255/t ex East Coast stores.

And finally, one possible lifeline may appear in the guise of Private Storage Aid, and there may be an opportunity for delegations from pig production member countries of the EU that are facing particular pigmeat trading difficulties to ask the EC to consider introducing Private Storage Aid as soon as possible.

Although this takes product off the market, it reappears later on and works rather like a second mortgage, but at least it gives the industry a bit of breathing space.

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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