It Ain’t Easy

Something of a two-tier trade is continuing to emerge with the gap between UK and EU pig prices continuing to widen.

Although the latest SPP managed to nudge up by 0.21p to stand at 153.01p, the equivalent German producer price has risen by another three cents €1.88, which at current exchange rates is equivalent to 172p/kg, so perhaps our pig producers should change their nationality and become Germans before Brexit to obtain this premium!

On a more serious note, however, one of the reasons why the gap between EU mainland and UK pig prices continues to widen is that consumer demand within the UK for all red meats seems to have slipped with non-meat diets becoming more popular, especially amongst the young, as well as environmental concerns over the whole meat production system.

One of the many challenges which has emerged from the Brexit situation is the reluctance of UK pig meat exporters to agree any forward deals to sell pig meat to the EU mainland on a fixed price basis until they have a better idea of the levels of tariff that will apply.

Some UK abattoirs are reporting they have enough or even too many pigs to meet demand and most weekly contribution prices are expected to stay at similar levels within the 143p – 150p/kg range.

Spot abattoirs are also continuing to report a selective demand for fresh meat and with plenty of pigs about no need to put any more money on the table and with the added obstacle of the upcoming Bank Holiday which will reduce slaughter capacity ion some cases.

To underline the improving value of pig meat in the EU, of which we will no longer be Members within a couple of months, cull sow values over there have also improved by around three cents, but because of a slight weakness in the value of the Euro which traded worth 92.55p a week ago, but has now eased back trading on Friday morning worth 91.42p, UK cull sow abattoirs put up their overall base prices by around 2p/kg with most quoting in the 109p – 114p/kg region, but numbers remain fairly tight so demand has a reasonably firm edge to it.

Weaner prices published by the AHDB saw the 30kg ex farm average quoted at £54.46/head and the 7kg average at £39.67/head.

Demand for RSPCA assured weaners seems to be easing when compared with Red Tractor values following reports of some of the larger abattoirs indicating they had more than enough RSPCA assured pigs in the system.

With harvest well under way until the recent wet spell, UK yields are reported to be good although what happens on our tiny island compared with the rest of the world has very little impact on commodity prices. Spot wheat has been trading on an ex farm basis around the £129/t mark and futures wheat prices for September are quoted at £137/t with barley at £130/t.

Hipro soya for September-October is holding at similar values of around £307/t and for the November-April period a touch dearer at £312/t.

And finally, latest Kantar market research reveals that GB pig meat consumption fell by almost 5% on a year on year basis when calculated in mid-July and over the same period UK clean pig slaughtering’s rose by 3% so all in all, an 8% variation between supply and demand levels.

This is yet another reason why more attention needs to be given to pig meat promotion as the autumn approaches to avoid too many pigs being rolled as well as putting up carcass weights and dragging down the price. Despite cereal prices moving in producers’ favour in the run up to the end of the year, several challenges lie ahead but as somebody once said, “if it was easy everyone would be doing it”!

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About The Author

Based in Suffolk, Peter Crichton provides a wide range of valuation, auction and livestock marketing services, as well as supplying the UK pig industry with a wide range of consultancy services covering tenancy, contract advice, pig equipment and herd valuations as well as dispute resolution. For more information visit: www.petercrichton.co.uk