Little by Little

Unfortunately, the much needed pig price recovery seems to have fizzled out and has started to go into reverse gear with the ominous news that EU pig meat prices have taken a sharp downward turn and the influential German producer price falling by 15 Euro Cents (12.75p/kg) overnight.

Although this price slump has not yet filtered through to the SPP which rose by 1.91p to 166.83p, the signs are that next week it will remain at similar levels, which is bad news for all those producers hoping for further increases in pig prices to come to their rescue during these challenging times.

UK weekly contribution prices are also reflecting a lack of demand throughout the EU with most of the big players holding their contribution prices at the same level as they have been now for six weeks with 168p paid at the bottom end and 190p at the top.

There was however a little bit more interest in spot bacon pigs and some of the fresh meat abattoirs prices have been reported between 140p – 150p/kg, but still well below the SPP itself.

Following all the financial battering that the pig industry has taken there are reports of more herds being culled as we move into the summer and live pig supplies in the UK are going to become very short, rather like the cash in many pig producers pockets.

Cull sow values have also followed the slump in EU wide pig meat prices with UK export abattoirs dropping their bids by around 11p/kg to between 63p – 67p/kg, which represents a fall of approximately £16/head off their bottom line value, despite a stronger Euro rising from 84.2p to 85.6p.

Weaner values have improved for those producers with contracts tied to the SPP with 7kg RSPCA Assured trading in the £36 – £42/head range but the spot market is an altogether different story with space very scarce with a shortage of buyers with those who are around trying to assess how much (or how little) finished pigs are likely to be worth in a few months time and worse than that whether or not feed ingredient prices will continue to be spooked by the ongoing warfare in Ukraine, which is causing havoc in the commodity markets not to mention the plight of the whole country in the face of the Russian invasion.

As a result of the ongoing conflict between Russia and Ukraine, feed ingredient prices are continuing to romp ahead with feed wheat for June delivery hitting £335/t and UK ex farm spot feed wheat averaging £317/t.
Feed barley prices are only a little behind wheat with June traded at £316/t and September at £306/t.
Soya prices have in the main levelled out with Hipro soya for June – October at £470/t and longer months saw May – October traded at £451/t.
Rapemeal for August – October is worth £333/t.

And finally, hats off to the NPA for underlining in their appeal to Tescos that unless the British pork supply base receives more support from all the major retailers, up to four out of five British pig farmers could go bust, which is a tragedy for the whole pig industry.

Perhaps Tesco’s famous mantra should be changed to from ‘every little helps’ to ‘very little hurts’?

There is now a huge disconnect between estimated COP levels in the region of 220p/kg at a time when net pig returns are struggling to achieve much more than 170p/kg, which works out at a loss of close to £50/head on every pig leaving a Red Tractor unit with even higher costs being faced by RSPCA Assured producers.

Live pig numbers in the UK are predicted to crash as losses at this level are completely unsustainable and it looks as though much more foreign pork will be heading this way in the months and years ahead.

And finally finally, sad news that Dr Zoe Davies the NPA chief executive has decided to leave this sector of the industry after 14 years of fantastic service and looking after the interests of the industry as well as going the extra mile along with her brilliant team of colleagues.

Zoe and her expertise will be sorely missed and it will need a quite remarkable person to step into her shoes, but all the best with a new career in the NFU.

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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