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Comment

Don’t Give Up

Peter CrichtonBy Peter CrichtonNovember 27, 20203 Mins Read
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As the festive (?) season approaches, very much a case of ‘no room at the inn’ is emerging across pig markets throughout Europe and beyond.

UK pig numbers are continuing to stay well ahead of demand, with significant numbers of pigs being rolled once again as overweight numbers build up.

The latest weekly contribution prices are continuing to lose ground with most down by 2-3p, within the 135p-139p bracket and well below COP levels.

Spot prices are also continuing to fall, with very few bidders active in the market other than at bargain basement levels, with most buyers having more than enough pigs on their hands without venturing into the unknown. Regular spot pig suppliers will be lucky to get more than 140p and one-off loads could be closer to 130p.

Reports are also being received of much cheaper imported pig meat undercutting domestic prices to such an extent that some financial casualties amongst producers on both sides of the Channel is looking inevitable.

The cull sow market continues to plumb the depths, with little evidence of culls being worth much more than 40p/kg. A slight reduction in the value of the Euro which traded on Friday worth 89.25p also did nothing to help the pig meat import/export balance.

Weaner space remains hard to find as prices continue to shadow the ongoing plunge in the SPP, with the majority of 7kg weaners in the £35-£40 range and the latest AHDB 30kg average quoted at £52.88/head.

With feed costs still on an upward track, weaner buyers remain extremely cautious especially with so many negative signals throughout the market and the likelihood of finished pig prices remaining under significant pressure as the year end approaches and beyond.

Rising commodity prices continue to put up the cost of pig feed ingredients, with UK feed wheat quoted on the futures market at £197/t for December and a slightly less expensive picture for longer months with September 2021 traded at £160/t. UK feed barley is quoted at £152/t for December 2020.

Protein prices also remain high, with Hipro soya traded at £396/t for December/January 2021 but a slightly more bearable £364/t for July-October 2021.

And finally, disturbing news that some EU member states are planning the liquidation of sow herds while prices remain in freefall due to Covid and the lack of access to the major Asian markets such as China, adding to the confusion in the months ahead arising from Brexit.

German weaner prices are reported to have slumped from €58.5 compared with €19.35 and this will continue to have a devastating effect on EU wide prices, even though the UK will not be in the EU for very much longer.

The news of a slump in German prices comes at the same time as pig meat production in China is forecast to grow by 10% next year, with the Chinese Government reportedly aiming to produce 95% of its own pig meat in the years ahead but, as the saying goes: “When the going gets tough, the tough get going”.

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Peter Crichton

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