Something of a buyers’ market is emerging as far as finished and store pigs are concerned, with pigmeat imports still posing a major threat to the UK supply chain, coupled with indifferent consumer demand for certain cuts, with loins in particular being hard to clear.
The DAPP also continued its downward track and now stands at 162.62p, and no-doubt the SPP and the APP will also follow suit.
With some contract bacon buyers having more pigs than they really needed, something of a backlog is building up in the system and spot buyers were spoilt for choice.
Although, earlier in the week, some spot bacon deals were done around the 163-165p/kg mark, by Friday these prices had all but evaporated and those spot buyers with any space were looking to buy at or below 160p in some cases.
Hopefully, the recent spell of warm weather will stimulate barbecue demand and slow down growth rates, which might help to put a firmer base in the trade, but with school holidays looming, we could be in for a difficult few weeks until the autumn is upon us.
Cull sow prices have held at recent levels, with most quotes in the 90-92p/kg range and an odd copper or two available for those with large loads. This is probably more due to a slight reduction in the availability of cull sows in the UK rather than any significant improvement in EU mainland prices, where the Russian pigmeat import ban remains in place and continues to damage export prospects.
A slight weakening in the value of the euro, which traded on Friday at 79.14p compared with 79.51p a week ago, will do nothing to help on the import/export front, and the rising strength of sterling remains a thorn in the side of the UK pig industry as far as pigmeat values are concerned, despite the benefits on the feed market.
Weaner prices have stalled, reflecting a lack of space in the system due to the slowdown in finished pig slaughtering levels, with the AHDB 30kg ex-farm weaner average quoted at £56.36p and 7kg weaners at £40.09p.
With finishers preoccupied with harvest and straw carting, this is often a difficult time of year to shift weaners, but it can be a missed buying opportunity because prices tend to rise in the autumn once harvest is gathered in and finishers decide to fill some empty pens.
Cereal prices are continuing to slide due to good worldwide crop conditions and stocks, with the result that the latest LIFFE feed wheat futures prices for November lost a further £2.85 and closed at £129.15/t, although March 2015 is looking more expensive at £137/t.
Old-crop feed wheat has slipped again and traded at the start of the week about £128.60/t ex-farm, but there are reports that new-crop off-the-combine prices are likely to be little more than £115-120/t according to spec and region.
Chicago wheat prices have also hit contract lows and the publication of the July USDA WASDE reports continue to provide bearish information on a weakening market.
Total GB plantings for cereals and OSR are up by 6% from 2013 and some bumper yields are reported, which may add further gloom to the arable sector, but delight as far as pig producers are concerned.
And finally, it’s good news to hear that the winner of the Best Idea Sausage in last year’s BPEX Food Service pork sausage of the year competition will now be supplying one of the UK’s major airlines, so at least in this sector “pigs might fly”.
> 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