Although the latest SPP is only down 0.14p to 160.79p, all the signs are that the SPP will continue to slip until the existing backlog of overweight pigs in the system is cleared at a time when feed costs are continuing to soar.
The UK pig industry is already having to face a tsunami-type situation where the industry is being flooded with a whole range of problems including cheap imported EU pork, very few of which are of our making but which are putting pig producers under yet more serious financial pressure.
Weekly contribution prices are flagging with one of the main market leaders dropping their weekly price by 3p to 152p and further down the scale others are as low as 140p.
Spot bacon prices are generally not available due to a lack of space, but for those producers who have managed to find a hole somewhere prices between 135p-140p/kg have been reported.
However, until a way can be found to persuade local and migrant labour to be able to return to work it is difficult to see a solution to the current crisis with pig throughputs down by up to 25% due to critical abattoir shortages.
The only good news as far as the cull sow market is concerned is that following last week’s sharp falls quotes have remained at stand on levels rather than going down again with most traded in the 50p-55p/kg range, although sellers with complete loads have in some cases been able to secure a modest premium.
The latest AHDB 7kg ex farm weaner average is quoted at £41.18/head but as space on rearing/finishing units continues to dry up due to the blockage in the system at the slaughtering end, this could well push down the weaner average price by a significant amount and those producers with secure contracts need to keep them in a safe place during these tough times.
Feed prices have been influenced by reports of lower Russian wheat yields and the northern European market has also been set back by rain and lower temperatures, which is also hitting crop quality and pushing crop values.
- UK ex-farm spot feed wheat has averaged £176.20/t over the past week;
- Futures markets saw September feed wheat deals agreed at £189/t compared with £185/t a week ago;
- UK feed barley deals have been agreed at £171/t for September;
- Proteins remain dear with Hipro soya traded at £362/t for September – October, which is up from £354/t a week ago; and
- Longer months look better value with Hipro soya for May – October 2022 worth £336/t and rapemeal for September – October 2021 at £233/t.
And finally, as if there wasn’t enough to worry about, meat imports to China and the Far East have slowed down which has hit domestic prices in the Far East quite hard with the volume of pork imported down by 15% compared to July 2020.
At the same time, the number of pigs in the national herd in China is increasing following their recovery from African swine fever over the last twelve months.
And on that note, producers also need to be extra vigilant to prevent ASF finding its way to these shores because that really would be curtains for the industry, but in the meantime, do not give up unless you have to.