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Comment

Catch It Like A Fever

Peter CrichtonBy Peter CrichtonSeptember 13, 20193 Mins Read
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Although the SPP took a surprise downward step, dropping by .43p to 152.9p, the general feeling seems to be that UK pig meat prices will continue to improve albeit well behind their foreign counterparts where the influential German producer price of €1.85 is equivalent to 164p/kg in our money and 11p ahead of the SPP.

Some but not all contribution prices are also improving in value, up by 1p in places but still well behind the SPP and in school report terms “could do better”.

Those abattoirs who have China export certificates are also securing a much higher return for their exports to Asia which can in some cases are reported to be worth an extra 10-12p/kg and it would be good to see more of this shared with producers.

The spot market is also tending to reflect this upward trend with spot bacon values in and around 153-156p according to spec.

Cull sow quotes have stayed at similar levels due to a slight weakening in the value of the euro which traded today worth 89.1p compared with 89.79p a week ago with most culls trading in the 108-113p range but numbers remain fairly tight and those with large loads may be able to haggle a copper or so more in some cases.

Weaner prices saw demand travelling in two directions at once with the latest AHDB 30kg average dropping by a whopping £4.23/head to £51.89p compared with a modest rise for 7kg pigs up by .06p and now averaging £39.35p indicating that buyers are showing more confidence in long keep 7kg piglets rather than 30kg weaners.

Feed markets have remained at generally similar levels on the week, although there have been reports of spot wheat traded ex farm as low as £120/t, futures prices have seen feed wheat for October delivery traded at £135/t and September 2020 at £144/t.

Feed barley remains good value and October 2019 prices have been in £123/t region.

Protein costs are little changed with Hipro soya for November-April ’20 delivery worth £304/t and for May-October ’20 £307/t, but all in all pig prices seem to be favouring “horn not corn”.

And finally, more on the ASF epidemic as it continues to cause havoc in the Far East and has now spread to the Philippines where over 7,000 pigs have already been culled.

Pig output in China is reported to be down by over 30% and for the time being will continue to benefit global pig meat prices. This week USA hogs closed by 3 cents to the pound, further underlying the linkage between ASF and a “black hole” in pig supplies, which should benefit those countries who have managed to stay free of ASF to a significant extent.

A word of warning however is that the Chinese government are planning to subsidise large farms to help rebuild pork production systems with some of these projects likely to be completed before the end of 2020 and pork will also continue to meet increased competition from poultry where the production levels continue to rise so it could be a case of two legs good, four legs bad!

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Peter Crichton

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