Peter Crichton’s commentary for November 7, 2014

Although prices have continued to ease, further signs are emerging that we are fairly close to the bottom of the market as the gap between UK and EU pigmeat prices narrows, but there’s still a differential of about 40p/kg, which is continuing to put downward pressure on the whole UK pigmeat supply chain.

The latest SPP eased another 1.33p and stands at 149.76p compared with 162.93p when it was launched in April, which represents a drop of 13.17p, equivalent to more than £10/pig.

A chill wind also continues to blow through the spot market, where prices eased back by another 2p and unfortunately some sellers had to accept below the 130p threshold that had previously held firm a week ago. Rather than let the pigs pile on more weight, perhaps 128p was the only route to take.

Contract bacon sellers continue to earn significant premiums, although with a wide range of different contract reference prices, it’s difficult to come up with an overall average, but those with an SPP element would probably be averaging close to 150p/kg for Red Tractor and Farm Assured pigs, and a further 6p more for Freedom Food.

The euro ended the week little changed, trading on Friday worth 78.43p, and as a result, cull sow bids were generally at stand-on levels, with the two major buyers operating in the 80-82p/kg range. This time last year, culls were trading at 115p, which represents a reduction of about 35p/kg deadweight, equivalent to a loss in value of more than £50 per sow, which may explain why some breeders are choosing to re-serve older sows rather than dig deep for replacement gilts at a time when culls are coming to so little money.

The weaner market continues to reflect finishers’ anxieties over finished pig prices early next year, although the AHDB 30kg ex-farm weaner averages improved a touch to £48.91p whereas the 7kg average is continuing to slide and now stands at £36.31p. Spot weaner trades are still at a significant discount when compared with the AHDB average prices, which include a significant proportion of weaner contract deals.

Cereal prices seem to have levelled out following several weeks of gains, with the latest ex-farm spot feed wheat price quoted at £116.80/t and November wheat futures showing a slightly easier trend at £117.80 and March 2105 at £122/t.

But although cereal values may have paused for breath, proteins are becoming expensive due to strong US export demand and transport issues. As a result, domestic oilseed prices at the end October reached levels unseen since June, with rapeseed at £260/t ex-Erith for November delivery and rapemeal on the same spec at £170/t. In both cases, these prices are £5/t up on the previous week and Hipro soya continues to move ahead, up a further £12 on the week to £349/t on Friday.

And finally, it was good to see the lovely LIPs Ladies walk off with the 54th David Black Award at the breakfast presentation ceremony on Wednesday morning, followed by more gongs going out to the good, the bad and the ugly at the Royal Garden Hotel that evening at the inaugural National Pig Awards, promoted by Pig World and many generous sponsors. Even though pig prices are under so much pressure at present, it was good for those with any hair left to let it down and have a really good night out in The Smoke. Roll on next year…

> 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

Get Our E-Newsletter - Pig World's best stories in your in-box twice a week
Will be used in accordance with our Privacy Policy
Share.

About The Author