Although the SPP has finally breached the 200p mark, rising by a modest 0.29p to reach 200.22p, this has to be looked at in the context of soaring feed prices, which, thanks to the sabre rattling of Comrade Putin have seen protein and grain prices jacked up to unsustainable levels.
Closer to home, the influential German producer price has also hit the buffers and remains at €2.09, which is equivalent to 185p/kg in Sterling terms, but can still undercut domestic pig prices by a wide margin, well below COP levels, which are reported to be in the 225p-230p/kg region and more in places.
News that one of the major players in the industry had dropped their weekly contribution price by 5p/kg was met with dismay, with the result that the main UK weekly contribution prices are now between 173p/kg at the bottom end and 190p/kg at the top.
The spot market is currently oversupplied as far as bacon weights are concerned and prices remain stuck in the mud in the 175p – 190p/kg range, but lighter gilts have been traded at just above the 200p/kg level.
Cull Sows
Cull sow prices have stood on between 76p – 80p/kg, despite a stronger Euro, which traded at 88.4p compared with 86.9p a week ago.
Weaners
Weaners generally traded at similar levels over the past seven days and remain anywhere between an estimated £42 and £48/head but spot buyers are remaining on the side lines as they digest sharply rising feed prices and the direction the finished pig market is likely to take between now and the end of the year, which is not looking too good.
Feed Market Trends
In the cereals market virtually all commodities are trading at more money than they were a week ago and remain unsustainable as far as pig producers are concerned.
Spot ex-farm UK feed wheat deals averaged £267.80/t over the past week up from £261.10/t seven days earlier.
This upward trend has also featured in the futures markets with feed wheat for October delivery at £282/t and for September 2023 at £268/t.
Feed barley continues to follow a similar upward track with feed barley deals agreed for October at £282/t and twelve months ahead at £268/t.
Protein values have gone up with a bang with Hipro soya for October delivery soaring from £508/t seven days ago to £541/t today and longer months have been in the £484/t region. November – January 2023 rapemeal deals are currently £354/t.
All feed ingredients remain highly volatile and it looks as though hostilities in Ukraine are unlikely to go away and could even get worse.
And finally, it seems inevitable that more producers will have to close down or reduce the scale of their units to be able to stay in business, but for many the waiting will soon be over as cull lorries queue up with more herds heading for the exit door.
Some industry sources are suggesting it could be spring 2023 before the beleaguered UK pig industry starts to move into the black.
