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Comment

China In Your Hand

Peter CrichtonBy Peter CrichtonSeptember 16, 20224 Mins Read
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Mixed messages from the market place, with the SPP going up by a modest 0.4p to stand at 199.93p, but still a long way to go before the pig industry can consider itself out of the red.

EU pig prices seem to have hit something of a plateau, with no change to the influential German producer price, which remains at €2.09 or 181p/kg in real money.

UK weekly contribution prices are still falling away from market values, which is underlined by the fact that since the end of March this year, the SPP has gone up by 53p/kg, but over the same period, weekly contribution prices have only risen from an average of 1.76p/kg to 184p/kg and are a country mile away from representing current UK pig meat values.

Spot bacon prices are also stuck in something of a rut, with light bacon weights in or around £2/kg, but heavier one-off loads of baconers remain at a discount in the £1.80 – £1.90/kg range for the most part and have yet to reflect the shortage of pig numbers in the supply chain, with cheap imports continuing to undercut the domestic market.

Cull Sows

Cull sow prices also appear to be on something of a plateau and remain at last week’s value with most worth between 76p-80p/kg and the Euro has also remained little changed trading at 86.9p, but a weaker Pound would work wonders for the pig meat export trade as far as UK pig farmers are concerned.

Weaners

With no AHDB averages available it is difficult to quote current weaner prices, but most contract 7kg piglets remain within a very wide range of anywhere between £42 – £48/head, with buyers remaining extremely cautious due to further rises in ingredient costs and uncertainty over finished pig values in the run up to Christmas.

Feed Market Trends

Ex farm UK spot feed wheat prices are continuing to move ahead with the latest weekly average quoted at £261.10/t up from £259.90t a week ago.

Futures prices are also bullish with October feed wheat traded at £272/t and September 2023 at £262/t. Feed barley values remain a sellers’ market with October quoted at £254/t and September 2023 at £247/t.

Protein values are also continuing to move ahead with Hipro soya quoted for October delivery at £508/t compared with £484/t a week ago and longer months saw May – October 2023 at £476/t up from £458/t seven days earlier. November – January 2023 rapemeal deals have been agreed at £329/t.

Unfortunately, the whole of the commodity market remains spooked by the ongoing war between Russia and Ukraine as well as the possibility of Comrade Putin creating negative consequence for the Ukraine grain corridor.
On the basis that markets dislike uncertainty it is very difficult to forward plan purchases of commodities with any degree of confidence or accuracy.

And finally, although there is plenty of bad news around as far as the pig industry is concerned one possible chink of light is the report that global pig meat prices in the southern hemisphere and China in particular are starting to move ahead with month on month increases in the cost of pork in China, which is reported to have gone up by 25.6% in July followed by a further price rise of 22.5% in August.

This could be just in time to revive ailing pig prices in the western hemisphere and hopefully the Chinese influence will become more sweet than sour.

In the meantime, problems on this side of the Channel include the soaring costs of energy and CO2 alongside budget conscious consumers cutting back on meat purchases, as well as some of the bigger players reducing slaughter numbers next week due to the bank holiday as a mark of respect for the Queen’s state funeral on Monday.

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Peter Crichton

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