Peter Crichton’s commentary for November 15, 2013

Something of two tier trade is developing, and although weekly contract prices all remained at similar levels with Gills at 172p and Tulip at 168p, as well as the DAPP holding almost unchanged at 171.97p, spot prices continue to reflect an ongoing shortage of pigs in the system and moved ahead by another 2-4p/kg this week.

Canny sellers were able to obtain spot bacon prices in the 180p/kg region, although only relatively small numbers were sold at this level; but this still provides an encouraging sign in the face of recent falls in European mainland pigmeat values.

The euro ended the week little changed over the past seven days trading on Friday worth 83.74p, but cull sow quotes have held at recent levels with buyers prepared to give an extra penny for large loads if squeezed as numbers are still relatively tight.

Cull sow quotes were generally in the 111-113p/kg range, although European demand is reported to be affected by lower volumes of fifth-quarter exports going to China and to Russia, where there are also higher stocks in cold stores.

Weaner prices have hit something of a plateau with the latest AHDB 30kg ex-farm weaner average easing a shade to £55.34/head from £55.93/head a week earlier, but demand for 7kg weaners is also reported to be firm providing they’re Freedom Food standard.

Grain prices have also held at similar levels, with November wheat quoted on the LIFFE market at £165.25/t and next July trading at £170/t, but this paints a much brighter picture than a year ago when ex-farm feed wheat was worth £206/t.

The gap between UK and EU pigmeat prices continues to widen, however, with the EU mainland average producer price now quoted at 135.54p/kg, which is more than 135p/kg lower than in the UK. There are concerns that major meat buyers may be tempted to lock into cheaper foreign imports during the first three months of the year, which could have a serious impact on domestic prices during what is often a fragile trading period.

There’s no doubt that some of the upmarket retailers are still placing their faith in UK produced pigmeat and are very keen to avoid any more embarrassment associated with further horsegate style exposures in the press in the run up to the key Christmas trading period. 

> Suffolk-based Peter Crichton is an auctioneer 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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