Although the SPP is still rising it’s rate of progress continues to slow down and this week it went up a mere 0.66p to stand at 198.06p.
This compares with a much brighter picture being painted in Europe where the influential German producer price has gone up by 20 Cents over the last three weeks, putting on a further 5 Cents this week to hit 2.05 EUR.
A black hole is opening up in live pig numbers at home and abroad but, despite recent price rises, imported pig meat continues to head in this direction at a producer price of around 179p/kg in real money compared with UK producers’ costs in excess of 220p/kg, according to the latest AHDB statistics.
To make matters worse, UK weekly contribution prices remain stuck in the mud between 178p/kg and 190p/kg, which on average is 12p/kg below the SPP.
Just to rub salt into the wound, a number of the larger abattoirs have also cut their throughputs by up to 20%, mainly due to poor demand and ongoing labour shortages which continue to plague the industry.
As a result, spot buyers have been spoilt for choice with surplus pigs available and prices well below COP levels with regular sellers able to agree spot deals for lighter weights approaching 200p/kg, but heavier spot bacon remains in the doldrums at a significant discount with prices around 185p/kg.
Cull Sows
One shaft of sunlight is that UK cull sow prices have continued to follow the upward value of EU pig meat values with UK cull sow exporters lifting their quotes by another 6p/kg this week to between 67p – 71p/kg, which is some consolation for those producers who are in the process of closing down their herds.
The Euro has remained little changed on the week trading at 84.60p.
Weaners
With the SPP almost stationary, weaner prices are generally at similar levels and continue to be quoted within a very wide range, but in the absence of any AHDB averages it is difficult to establish values.
However, RSPCA Assured 7kg piglets sold on contract are easier to move than their spot counterparts, which is mainly due to ongoing concerns by buyers over production costs and pig values in the run up to Christmas.
Feed Market Trends
Unfortunately, very little good news to report in this sector with futures prices for feed wheat quoted at £258/t for September delivery and £247/t for September 2023.
UK feed wheat on an ex farm basis remains too much of a challenge for producers to feed to pigs with the latest spot prices quotes rising to average £250/t for the past seven days.
Feed barley is also tending dearer with September delivery quoted at £246/t and £232/t for September 2023.
Protein values are also moving ahead and saw Hipro soya for September delivery up by £20/t to £498/t and longer months saw May – October 2023 up from £424/t to £448/t over past seven days.
Rapemeal is also trading in a bullish market up by £15/t for September delivery at £310/t and for November – January at £327/t, which is a big leap from £290/t only a week ago.
And finally, Comrade Putin’s continued attack on Ukraine is having disastrous consequences for pig producers throughout the UK and beyond leading to soaring COP levels, and abattoirs and processors also face being hit hard by the energy crisis over the next few months when their existing utilities supply contracts are renewed and could rise by up to 80%.
Although a massive shortage of pigs throughout the EU and UK is just around the corner, it is hard to dismiss the Russian influence on the UK economy coupled with labour shortages, Covid and yet more challenging consequences for the whole pig meat supply chain
