The current condition of the UK pig industry could be described as a ‘perfect storm’ on top of the weather-related challenges that outdoor pig producers have had to face, as well as the fallout from Covid and Brexit.
The SPP is still tumbling and fell this week by another 1.36p to 141.69p. Weekly contribution prices are now around 10p adrift from the SPP, although some of the major players stood on at similar levels others dropped 1p with most quoted in the 132p and 134p range compared with 162.5p a year ago.
A chill wind continues to blow through the spot bacon market with reports of some producers who have run out of space to hold pigs having to cope with prices as low as 110p/kg, although regular sellers are more likely to negotiate prices in the 120p/kg region.
German prices have held at a similar levels with the influential producer price quoted at 1.19 EUR, which is equivalent to a mere 105p in our money.
Cull sow prices are continuing to suffer from the difficulties over slow customs clearance times both in this country and France and Germany with eagle eyed officials continuing to make life uncomfortable for UK cull sow exporters, with prices quoted generally between 33-35p/kg.
This puts the value of an average cull sow at around £55 before deductions and unfortunately a strong GBP has done nothing to help with the Euro trading at 88.6p today, meaning that the value of imported pig meat has dropped and the same applies to any pig meat imports from the UK having to jump through all of these bureaucratic hurdles in the first place but, surprise surprise, reports indicate that importers of cheap EU pig meat are not encountering similar delays entering the UK!
Weaner prices are also continuing to reflect the falling SPP and rising feed costs but in the absence of any AHDB prices being published, RSPCA Assured ex farm 7kg piglets are changing hands (or trotters) in the £37/head region with their 30kg counterparts generally worth in the £50-£54/head region, according to load size and quality.
Although cereal and protein prices have come very slightly off the boil, they are still too hot for most producers to handle with UK feed wheat futures trading at £214/t for March and £167/t for September.
UK spot trades for feed wheat on an ex farm basis have averaged £206/t and Hi Pro soya has eased a touch to £416/t for March.
Pig producers who are running out of feed cover will have a rude awakening if they have to venture into the spot market to buy proteins or cereals.
The old rule of thumb that the price of wheat measured in Pounds per tonne should not exceed the Pence per kilo value of a bacon pig has been shattered and kicked into the long grass until one day perhaps we will see some equilibrium in feed cost and pig values, which are clearly unsustainable at present.
And finally, in addition to the collateral damage being caused by the Covid and Brexit situations, the ASF elephant in the room continues to haunt pig producers on a global basis with reports of a new ASF strain being discovered in China and although less contagious than the original virus, is still a threat to the international pig industry.
Closer to home, there have been over 500 cases of ASF being found in the German wild pig population but thankfully, at the time of preparing this report, no domestic pig herds have been affected.
Looking ahead however, there are signs of lower numbers of piglets being weaned due to 2020 infertility problems, which could be a glimmer of light in the long dark tunnel embracing the UK pig industry….we shall see!