Peter Crichton’s commentary for October 31, 2014

Although sources of good news have been somewhat scarce, one slightly positive factor is that German pigmeat prices seem to be holding at stand-on levels and sow quotes were also largely similar.

As a result, one-off spot bacon sellers were faced with taking prices around the 130p/kg region or, in some cases, slightly below this, whereas those on contract with a tie to the SPP, average spot prices and weekly announced figures were generally still trading at or around the 150p region for Red Tractor pigs with Freedom Food worth another 5-6p more than this.

In any event, however, based upon latest COP estimates of about 146p/kg, some producers are now trading in the red.

As mentioned, sow prices were generally at similar levels with most sellers prepared to pay in the 80-82p/kg range according to spec, but this sector was not helped by a further reduction in the value of the euro which traded on Friday worth 78.36p, compared with 78.96p a week ago.

Weaner prices continue to experience downward pressure due to a mixture of a shortage of finishing space, as well as further doubts about the value of finished pigs early next year, with the result that the latest AHDB 30kg ex-farm weaner average took a knock and has dropped from £50.43/head to £47.49, and 7kg pigs have also experienced that sinking feeling, but to a lesser extent, falling from £37.66/head to £36.45/head. In both cases, however, spot trades have been recorded at £2-4/head below this in some regions, but at times like these, those producers with either finished pig or weaner contracts should keep them in a safe place, that is, under the bed.

Another worry has been the stealthy increase in cereal prices, and feed wheat is now recorded as trading on an ex-farm basis at £116.80/t according to Farmers Weekly, compared with £99.70/t recorded at the end of September.

Although feed wheat futures prices have dropped today by £3.75/t, with November traded on the LIFFE market at £118 and March at £126.25, strong export demand for US soya meal is also tending to push up compound feed costs.

According to local analysts, Russia’s 2015 wheat harvest may fall by between 15 to 20% due to dryer growing conditions and weak emerging autumn crops, not to mention a depreciating rouble which has lost 17% in value during the past few months.

And finally, on a more positive note, hopefully the good, the bad and the ugly will be duly rewarded at the 2014 National Pig Awards Ceremony that takes place on November 4 at the London Royal Garden Hotel that evening, which will be a long day for those who have also travelled down to the House of Lords for breakfast to see who has been nominated as the worthy winner of the 2014 David Black Award.

There is, therefore, every possibility of seeing one or two leading members of the pig industry with slight hangovers on Wednesday morning!

> 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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