The UK pig industry is continuing to face a rising number of challenges and although the SPP went up by a gnat’s whisker of 0.03p to 160.93p, unfortunately because of the build up of unsold heavy pigs in the system all the signs are that this key index price will soon start to slide.
The influential German market continues its downward track losing another five cents this week to stand at €1.37, which is equivalent to 116p before taking into account the lower slaughter and transport costs which apply throughout the German market rather than a gross price.
Unfortunately, there is very little good news to report and indications are that weekly contribution prices will take a further fall with up to 3p per kg being knocked off pig values with most now between 155p at the top end and close to 140p at the bottom.
With more sellers than buyers by a country mile, spot bacon space is virtually non-existent and although regular spot sellers should be able to agree deals in the 140p/kg region, one off spot loads of bacon pigs are virtually unsaleable.
All these situations are coinciding with slaughter pigs becoming overweight as their feed costs go up the probes do too, with space limitations becoming a potential welfare issue very soon.
Cull sow prices are also reflecting the falling European market with UK export abattoirs pulling back their bids by around 5p/kg with the result that as most cull values are between 50p – 55p/kg it can take up to three cull sows to buy one replacement gilt, as producers try to maintain fertility and production levels at a time when finances are already being stretched.
The euro has eased slightly trading at 85p on Friday.
Although no AHDB average 7kg weaner price has been published this week, the ex farm 30kg value is quoted at £56.61/head and 7kg values are still benefitting from a relatively firm SPP holding up weaner values in and around £37-£40/head, but they are unlikely to stay at this level for long.
Feed futures prices quoted today saw feed wheat slightly dearer on the week at £184/t for September compared with £179/t a week ago.
Ex farm old crop spot wheat prices averaged £173.70/t compared with £165/t seven days ago. Futures prices for feed barley have also increased with September traded at £168/t.
Protein values have remained little changed on the week with September – October Hipro soya quoted at £356/t and May – October 2022 at £332/t.
And finally, recent statistics are indicating that COP levels for most indoor pig units are around 170p/kg and based on net realisation slaughter pig values of (say) 140p/kg there is a 30p/kg deficit between the slaughter pig values and COP levels, which for an 80kg deadweight pig works out at a yawning financial gap of £24 per pig sold which is unviable for all those except producers with very deep pockets (and long arms) or understanding bank managers.
However, it is still very difficult to find many positives for the pig industry in the months ahead and it looks as though there will be more pain before any longer term gain emerges.
Two crumbs of comfort are that the AI semen usage is dropping across most of Europe indicating smaller volumes of bacon pigs may be coming to market in ten months’ time and a shortage of pig numbers, which could drive prices up and if labour costs continue to increase we could see a rise in migrant workers returning to the UK.
