Left in the Dark *

Still plenty of dark clouds as far as the pig industry is concerned, especially at a time when European prices are also falling from a very low base.

The SPP reflected this downward trend, dropping by 1.1p this week to stand at 139p which is almost 10p below the previous five year average, not helped by average carcase weights continuing to break new records hitting 95.42kg as well as pushing up probes which now stand at the highest recorded average level of 11.9 mm.

The situation on the other side of the Channel is even worse with the influential German producer price dropping by 3 Cents to 1.2 EUR, which translates to little more than 100p/kg in our money.

Most but not all UK weekly contribution prices have stood on within a fairly wide 130p – 138p/kg range, but while EU pig meat keeps flooding over the English Channel, it could take domestic pig prices down even further.

The spot market has also been hit by cheap imports undercutting domestic values and as a result regular sellers have found it difficult to get much more than 116p/kg for baconers, but one-off loads and overweights are difficult if not impossible to place.

A strengthening Pound has done us no favours as far as the import/export balance is concerned with the Euro traded today at only 83.5p.

Coupled with this are reports of large numbers of EU abattoir staff who are being regularly checked for Covid leading to a surge in absenteeism, which has hit processing plant volumes and throughputs. As a result, UK cull sow exporters to Germany have pulled their prices back by around 3p/kg from a very low base, with the result that most culls are now trading in the 21p-25p/kg bracket, which is more grief for producers and knocks yet another hole in budgets and bank balances.

No AHDB weaner averages were published this week, but with further falls in the SPP these are continuing to ease back with contract 7kg piglets generally in and around £32 – £36/ head. Some breeders are thankful to have fixed minimum prices in their contracts, but this is however making life very uncomfortable for finishers with feed prices showing little sign of easing back from current levels.

Feed prices were showing signs of easing earlier on in the week, but Comrade Putin’s sabre rattling in the Ukraine could disrupt wheat exports.

Unfortunately, since then cereal prices have started to creep up again with UK feed wheat traded on the futures market at £217/t for February and £197/t for September. The weekly UK ex farm feed wheat average price is quoted at £210.10/t and feed barley has also firmed with futures prices of £210/t for February and £184/t for September.

Proteins have eased back a touch, with Hipro soya traded for February at £421/t and for June- October at £390/t.
Rapemeal has dropped to a greater extent quoted at £299/t for February-April which is down £11/t over seven days.

And finally, as the first month of the New Year draws to a close there are still plenty of challenges to be faced including the news that the Chinese pig herd of 504 million pigs allows them to be 100% self sufficient in pig meat (assuming these figures are correct), which firmly shuts the door on any opportunities for the UK to export pig meat in large volumes to China, except at the luxury end of the trade.

Closer to home, very little progress seems to have been made by the Defra secretary, who one frustrated producer recently referred to as George Useless, with only a trickle of abattoir workers heading this way and a very poor response to his private storage proposals as well as expensive wean and cull arrangements for overweight pigs.

Financial pressures continue to build with producers’ bank statements showing more than fifty shades of red and in the words (almost) of Winston Churchill, never has so much been owed by so many, etc, etc.

Some of the more forward-thinking processors are, however, asking questions about pig availability later on in the year, which is a clear sign that they, too, realise that it is unsustainable for producers to keep churning out pigs at current rock bottom price levels. But until then the pig industry will remain very much in the dark.

* Meatloaf RIP

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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