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Comment

Be Careful What You Wish For

Peter CrichtonBy Peter CrichtonJune 5, 20203 Mins Read
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With horse racing back on track, this is a timely reminder that UK pig numbers are getting like jockeys; very short.

As a result, some weekly contribution prices might be starting to wake from their long hibernation with the good news that one of their main players has put their contribution price up from 163p to 166p, but at this stage none of their competitors appear to have followed suit so it is a case of ‘mind the even wider gap’ between the top of 166p and the bottom of 155p, i.e. 11p/kg!

Spot pig supplies are extremely short with the old adage that pigs are rather like policeman, they are not there when you want them and turn up when you don’t!

For those sellers lucky enough to have spare spot pigs, prices in the 172p – 174p/kg region were available but the majority haver remained on contract where prices have revealed a fairly wide gap between the SPP, which actually went down 0.06p to 164.45p and spot pigs were trading at around 8p/kg more than this.

Cull sow prices have however remained relatively static and signs are emerging that there could be an improvement in European pig meat values in the weeks ahead, although throughputs continue to be hit by Covid related plant closures.

Cull sow bids have been in the 65p – 68p/kg range but with more available for those who were prepared to haggle.

However, the Euro did us no favours easing from 90.29p a week ago to 89.71p today.

Weaner prices are continuing to improve as far as 30kg pigs are concerned, with a rise in the AHDB 30kg ex farm average of £1.73 to £61.67/head, although 7kg piglet prices remained virtually unchanged at £42.88/head.

With lower UK pig numbers currently being weaned the signs are that there could be more buyers than sellers in the weeks ahead, although finishers’ margins will continue to be eroded by rising feed prices and the rising cost of straw when harvest arrives due to much lower UK cereal yields being forecast.

UK cereal futures prices are however continuing to nudge ahead with UK feed wheat quoted at £170/t for July and £173/t for September and for spot loads UK wheat is quoted at £157.30/t ex farm.

Feed barley values are also following an upward track with September quoted at £141/t.

Protein values are on the other hand tending easier with Hipro soya for July-October delivery at £301/t and longer contracts for May-October 2021 worth £304/t.

And finally, reports are circulating that once the UK leaves the EU a dual tariff system, which would allow the imports of products which may have been produced in other countries to lower standards in our own, could be set up.

Anything that is likely to undermine pig meat prices could hit the industry very hard at a time when prices are beginning to recover to profitable levels and to reinvest in modernising worn out and old pig units which are sorely in need of some TLC soon and a post Brexit ‘cheap food’ policy could hit UK pig prices very hard.

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Peter Crichton

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