Tiptoe through the Tulips

Apart from the recent announcement that Tulip, who are the UK’s biggest pork producers, has been sold to the Brazilian food giant Pilgrim’s Pride Corporation, it has been a routine day with pig trading in the UK remaining at stand on levels in most cases.

The latest SPP slipped by .10p and now stands at 152.95p whereas the influential German price stood on at €1.85 which works out at the equivalent UK price of 168.5p, but the gap between European mainland and UK prices remains as wide as ever, although there are some signs emerging of a possible increase in the much criticised weekly contribution price system which has kept a lid on prices for far too long…we shall see.

Demand for spot pigs remains subdued with enough around to meet most requirements and prices have generally been in or around the 150p mark.

Cull sow prices have also held at similar levels, but shrewd sellers could haggle a penny or so in some cases with most export quotes in the 107-112p region according to load size.

Weaner prices are holding but lack of space remains a major problem in this sector with the latest AHDB 7kg average largely unchanged at £39.01/head and the 30kg average now stands at £53.17/head but unfortunately demand for weaners is still under pressure with buyers reluctant to put much money on the table despite further falls in feed costs.

As far as feed prices are concerned, UK cereal values are continuing to slide with the latest average ex farm spot wheat price quoted at £121/t which compares with £170/t 12 months ago. Vive le difference! Chicago wheat futures have continued to fall due to larger global stocks and tough export competition and our (soon to be former partners) in France will need to export around 20 million tons of wheat following a 15% increase in crop yields over the past 12 months.

Futures prices are also continuing to drop with October wheat quoted at £132/t and September 2020 at £141/t with barley traded for this October at £123/t.

UK protein prices have however generally held at similar levels with Hipro soya quoted for November-April ’20 at £308/t and for May-October ’20 at £311/t.

And finally, the big story of the week has been the surprise takeover of Tulip Limited who are the country’s largest pig producers, by the Brazilian based Pilgrim’s Pride Corporation who have signed up to buy Tulip lock stock and barrel which will create one of the largest prepared foods businesses in the UK.

The price is quoted £290m and the new owners are indicating further expansion will take place across the whole business model providing opportunities for integrated production systems and a strong financial base.

Whilst this acquisition will provide greater liquidity levels it remains to be seen to what extent this acquisition will benefit pig producers in the longer term but no doubt we shall see!

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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