Although it is good news for producers to see the latest SPP rise by a record 7.18p to 157.73p, the picture as far as COP levels are concerned remain as bleak as ever.
European pig meat prices have hardly moved and the influential German producer price remains at €1.95, which is equivalent to 162p, indicating that pig producers on the other side of the Channel are also having some of the same problems as we are.
One-off loads of spot pigs are still within a fairly wide price range assuming space can be found with reports of deals agreed generally within the 110p – 120p/kg range. But regular sellers have in some cases been able to negotiate much better terms than some of the smaller wholesalers with prices for lighter bacon weights closer to the £2/kg mark in some cases, especially from those abattoirs who realise that losing handfuls of money is not sustainable for producers over the longer term but are keen to continue to support this sector of the market if possible.
At the time of preparing this report, due to the ‘short’ week UK weekly contribution prices have not been generally available but signs are emerging that when the prices are announced they are very unlikely to be much different from last week, with most weekly contribution prices forecast to be between 168p at the bottom end and 190p at the top.
Unfortunately, the stronger Pound has knocked the Euro back to 83p from 83.33p a week ago and although German cull sow prices have held at similar levels the market is showing some signs of weakness, which is a worry at a time when cull values should be going up and not down.
As a result most culls have been traded between 74p – 78p/kg, but due to more herds being culled much higher numbers are coming forward for slaughter.
The 7kg AHDB weaner price has not been published this week but those producers with weaner contracts tied to the SPP should be receiving a higher price than previously, but finishers are also reflecting on the losses they are suffering throughout the pig fattening process.Soaring feed prices continue to be the main talking point and there are no signs of the war and carnage being caused in Ukraine coming to an end.
Uncertainty over Russian and Ukraine import and export activity is continuing to destabilise the market with the result that UK feed wheat traded at £328/t for May delivery and £292/t for September. The UK average ex farm feed wheat price remains at £299.50/t and barley has almost overtaken wheat with feed barley for May delivery quoted at £319/t.
Protein values are still eye wateringly high with Hipro soya meal for May delivery at £484/t and rapeseed at £404/t for May.
And finally, recent reports are indicating that some producers could be losing as much as £61 per pig at a time when production costs have risen above £2/kg.
Unfortunately, unless there is some form of ceasefire in Ukraine and import/export links can be opened up for fertiliser, grain and proteins it is difficult to see how pig producers can be back in the black for at least another six months.
At the same time finished pig deadweight prices need to exceed £2.20/kg to give producers any real chance of survival. This underlines the old saying that ‘you have got to give if you want to gather’, but currently pig producers are continuing to get a financial and mental battering in these challenging times.
