As predicted with the inclusion of yet more overweight pigs in the SPP, further sharp falls have hit this index price reducing it by 3.55p this week to stand at 144.67p.
This trend looks to continue with yet more overweight pigs being included in the sample much to the fury of producers who continue to claim that these grossly overweight pigs are far from a ‘standard’ product.
The situation on the other side of the Channel also continues to paint an unhappy picture with the European average pig price equivalent to approximately 105p/kg, which undercuts UK prices by a huge margin when compared with our estimated COP of 180p/kg and underlines the much higher costs of welfare friendly pig production when compared with imports.
UK weekly contribution prices have in some cases stood and in others have slipped back by around a penny with most now between 130p and 140p.
A cold wind continues to blow through the spot bacon market with producer prices for regular sellers little more than 120p – 125p/kg, but there have been reports of one-off loads of non-farm assured bacon pigs as low a 85p/kg. This is not much more than some of the overweight pig rates being paid, all of which continues to lower the base value of pork to the detriment of producers.
All in all finished pig demand is “no worse” than last week, but still needs to be a lot better.
One positive point is that the value of the Euro has improved from 84.49p last week to 85.92p today, but unfortunately this was not enough to encourage UK sow exporters to increase their prices which remain at around 26p/kg, although slightly larger numbers are being exported despite all the bureaucratic hurdles to be jumped along the way.
Sharp falls in the SPP have continued to take their toll as far as weaner values are concerned with the latest AHDB 7kg average crashing to £33.68/head and the position remains critical and some producers have found it is impossible to find ready takers of spot weaner pigs which are in effect being given away with the unfortunate consequence that on farm slaughtering of healthy weaners is continuing.
Feed prices continue to soar with December 2021 feed wheat traded at £226/t and looking ahead for those who are still in business in September 2022, the feed wheat futures price then is still looking very expensive at £197/t.
The latest UK ex farm spot wheat price also underlines further increases with the UK weekly average now quoted at £211/t.
Barley values on the futures markets have also broken through the £200/t threshold and deals are being agreed for December 2021 in the region of £211/t with longer dates for September 2022 at £186/t.
Protein prices are still nudging ahead with Hipro soya for May – October 2022 at £343/t.
Rapemeal has gone up again with December – January 2022 at £296/t.
And finally, the crazy situation that the UK pig industry finds itself in comes in contrast to the cattle and sheep sectors where prices continue to fly ahead along and fewer lack of labour problems for processing at abattoirs, but industry sources are indicating that very low volumes of beef and lamb are imported to this country unlike at pork at rock bottom levels.
Adding to the current chaotic state of the pig industry are reports that labour shortages are now forcing British meat companies to send meat to the EU for butchering with revenue leaking out of the British economy to the benefit of the EU.
On the plus side, it is good to hear that Morrisons are proposing to reduce retail British pork prices in their stores and step up the volumes of bone in products, which will help to reduce processing costs and speed up abattoir output; hopefully some of the other major retailers will follow suit.
Looking further ahead, some abattoir buyers are suggesting that pig prices will turn around in the spring by which time something of a black hole in live pig supplies will have opened up and stoke up pig meat values for those who can stand the heat for long enough.
Until then the current pig meat supply chain chaos is likely to remain a major challenge to even the most efficient and well-funded producers.
PS. It is bonfire night this evening and it is an open secret that many in the pig industry probably know who they would like the ‘guy’ to be!