Unfortunately, UK pigmeat values are continuing to be hammered by low global prices and indifferent demand with the SPP also continuing on its downward path, losing another 0.84p this week to stand at 144.33p.
Although European pigmeat prices are just about holding on at last week’s low levels, changes in currency rates have meant that the value of our pigmeat imports has gone down and the same applies to exports.
Weekly contribution prices have in most cases held at similar levels, but are still far too low when compared with the SPP, with most in the 131-136p/kg range.
Spot bacon demand remains fickle and with ample pigs about, not to mention several major abattoir breakdowns this week, there was no need for buyers to put more money on the table to fill orders.
Although very few pigs are traded on a spot basis, those that were have generally been in the 136p – 140p/kg region, although regular sellers were 4p – 6p/kg ahead of this in some cases.
With the Euro trading on Friday worth 87p compared with 87.92p a week earlier, it was inevitable that sow prices were lower to allow for the weaker Euro with UK export abattoir bid prices generally in the 60p – 63p/kg range according to load size, compared with over 70p/kg a year ago.
With replacement maiden gilts still costing in the £180/head region, it can be a case of selling two sows to buy one gilt, i.e. sell two to get none free.
The weaner market remains under significant pressure although the AHDB have not published a 30kg price, but if they had it would almost certainly have been less than two weeks ago following the trend set by 7kg piglets which have fallen to £35.68/head; a relatively low return at a time when feed costs remain high. It is worth bearing in mind that an estimated 80% of the 7kg sample come from outdoor Freedom Food herds, which should be worth a premium over Red Tractor.
There has been no improvement in demand for either 7kg or 30kg Red Tractor weaners and in the light of falling finished pigs returns and the challenges posed by selling finished pigs in the January / February period, it is hardly surprising that there are very few takers for Red Tractor spot weaners in what has become a buyers’ market.
On the feed price front, UK protein values have remained at generally similar levels with 48% soya meal ex Liverpool trading at £319/t and 34% rape meal ex Kent at £205/t.
Cereal prices are showing a slightly easier trend, much to the relief of hard pressed pig producers, with November London feed wheat quoted at £167/t, March 2019 at £170.85/t and November 2019 at £155/t.
Improvements in the value of Sterling due to Brexit hopes have taken the Pound to its highest point since April this year and has led to some grain price falls on the Continent as a stronger Pound increases the competitive edge of imports, taking some of the pressure off the cost of compound feed ingredients.
And finally, reports that the US pork industry is looking to participate in future UK/US trade deals may put the domestic market under yet more pressure as the US have a much lower COP than in the UK, with calls from the National Pork Producers Council that all USDA approved pork and pork products must be eligible for export to the UK without additional regulatory requirements.
Although it remains to be seen if the UK Government compromise our higher production standards, unfortunately in Global trading situations the price often speaks louder than anything else and it would be a black day for the industry if Animal Welfare Standards were watered down in pursuit of trade deals.