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Comment

A change is gonna come

Peter CrichtonBy Peter CrichtonAugust 31, 20183 Mins Read
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The pig market has remained in “stand on” mode this week although the SPP is down by 0.39p to 148.71p, most weekly contribution prices have stayed at similar levels within the 134-142p range and spot bacon has traded in and around 145-150p according to spec.

However, there are signs that something of a “black hole” may be opening up in terms of finished pig availability in the months ahead following on from the scorching hot weather lifting summer infertility levels as well as many units suffering from PRRS and if pig meat demand picks up in the autumn, this could help to lift prices for producers who are still facing sharp rises in feed costs.

The cull sow market has remained at similar levels with prices a penny or two short of 80p but certainly at a level that may encourage some producers to re-stock ageing herds (or get out!).

A slight drop in the value of the euro, which traded today worth 89.82p, compared with 90.15p, was fortunately not significant enough to reduce cull sow export quotes but any further improvements in the value of the pound could work against the pig meat import/export balance.

Weaner prices are continuing to retreat with the latest AHDB 7kg ex farm average quoted at £37.35 but there was no 30kg price issued this week due to an insufficient sample. Spot weaner buyers remain scarce with the Red Tractor sector taking the brunt of lower prices not helped by high feed and straw costs which are currently stalking the industry.

On the subject of feed, wheat prices have drifted back marginally with UK ex farm spot feed wheat traded at £4/tonne less than a week ago averaging £169.70/t but £40 a tonne dearer than twelve months ago.

Futures prices have recovered some lost ground this week with November wheat traded on the London market at £182.15/t and March at £186.30/t. UK protein prices have also lost some value with 48% soya traded ex Liverpool at £329/t and 34% rape meal traded ex Kent at £231/t.

And finally, global pork traders will be closely studying the African Swine Fever situation in China where over 24,000 pigs have been slaughtered following confirmation of four ASF cases although this is only a tiny proportion of the overall pig population in China which is estimated to be 500 million head.

The ASF virus detected in China is the same strain as outbreaks in Eastern Russia in 2017 but as yet there is no evidence over the way in which the disease got into China and how it is spreading.

The Russian market is incidentally enjoying a period of soaring pig prices at the highest levels ever recorded thanks to a significant degree to the EU ban on exports of pig meat to Russia.

 

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Peter Crichton

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