Although the latest SPP has gone up again by 0.79p to stand at 155.82p, signs are emerging that UK pig prices may hit something of a plateau in the next few weeks reflecting lower meat prices across much of Europe especially in Germany.
The influential German producer price has eased by 9 Cents to 1.48 EUR due to a combination of falling pig prices in China and lower retail demand in much of Europe.
UK weekly contribution prices are unlikely to move much this week with the majority remaining within a wide band between 145p and 161p, which is well adrift of where prices need to be to have any chance of putting producers back in profit.
Spot bacon demand remains lacklustre with most pigs being sold on contract, but any deals that were agreed tended to be in the 140p – 145p/kg range with regular suppliers able to charge a penny or two more, but non-farm assured spot bacon pigs remain at a significant discount.
The value of the Euro has done nothing to help the cull sow trade with a stronger GBP reducing the value of the Euro from 86p to 85.7p.
UK cull sow exporters were able to trim their bids by around 7p/kg with most now trading in the 63p/kg region.
Weaner prices continue to be influenced by the SPP and the latest AHDB 30kg ex farm average is quoted at £52.16/head. 7kg piglets have been traded mainly in the £35 – £37.50/head range, but there is still a lack of enthusiasm for weaner buyers to go on a shopping spree with feed costs still too far over the red line.
One plus side is that with better looking cereal yields in the UK, straw prices may fall to some extent but probably not far enough to give producers much financial relief in the months ahead.
The prospect of better crop yields across much of northern Europe has pushed back wheat prices by around £8/t with UK feed wheat for July traded at £202/t compared with £211/t a week ago and September is also looking better value than it was at £172/t and easing to the tune of £6/t.
August feed barley traded at £158/t.
UK ex farm feed wheat spot prices saw the national average fall by £8/t to £194/t.
Protein prices have however remained firm with Hipro soya traded for July – October at £358/t and November – April 2022 at £362/t.
Rapemeal values have eased with July worth £258/t compared with £272/t a week ago.
And finally, China has revealed a significant increase of 5% this month in the total number of 266 million live pigs available, which has the effect of driving down domestic prices and has put importers’ margins under pressure.
The reappearance of ASF could kick all these factors into the long grass, but with Chinese sow numbers also up by around 8% all the signs are emerging that unless there is a massive hit from ASF the Chinese herd size is likely to continue to increase, which will put something of a glass ceiling over global pig meat prices for the time being.