The SPP continues on its upward track rising by 0.67p and now stands at 202.53p. European prices have remained at the same level for several weeks with the German producer price remaining at 2.00 EUR which is equivalent to 174p/kg, but the signs are that EU prices could also improve as spring approaches.
Because of the lack of pigs in the system, very few spot deals have been agreed with most producers short of their own contract numbers. The general indications are however that spot prices will need to be significantly higher than 200p/kg to have any chance of success as far as pig producers are concerned.
More reports are being received of shortages of finished pigs throughout the supply chain following a long period of unprofitable prices and it is no surprise that there are very few spare pigs available.
Cull sow demand has always been a good barometer of pig meat values in Europe, and it was good to see UK export cull sow prices go up by approximately 4p/kg and are now mainly within the 91p-95p/kg range.
The value of the Euro has remained static at 87.55p.
Weaner supplies are also under great pressure following on from the fertility problems arising from last summer and with this in mind weaner buyers have been looking long and hard at finding sufficient numbers to keep their finishing accommodation full rather than half empty.
Feed Market Trends
The latest UK weekly average spot feed wheat price is also painting a happier picture with deals agreed at £213.40/t with ex farm and although futures prices for cereals and proteins firmed slightly on Friday, they are still at much better levels from the pig farmers point of view with feed wheat for February delivery quoted at £230/t and for September £225/t.
Feed barley has also followed this trend with February traded at £215/t and September deliveries at £210/t.
Protein prices are still far too dear as far as pig producers are concerned with futures prices for Hipro soya quoted at £550/t for February delivery and £486/t for June – October. Rapemeal is looking a better proposition than soya with prices for March – April quoted at £353/t and £313/t for May – October.
More indications that EU pig numbers are continuing to shrink comes with the news that a major pork plant in Germany under the global pork processing giant Danish Crown will be closing.
This is reported to be as a result of falling pig numbers and also the adverse effect that African Swine Fever outbreaks have had across the whole of Germany.
UK pig producers also need to be aware of the drastic effects that AFS could have on our industry, which is just starting to recover from massive unprofitability in recent years.