Let the Good Times Roll?

The trickle-down effect of the ASF situation in China and the Far East is turning into more of a flood as reports are continuing to indicate that this virus is decimating pig herds in the affected countries, opening up export opportunities and benefits for those pig production countries where they are managing to stay free of this deadly virus.

The SPP put on a relatively modest .4p, and this has lifted its value from 140p at the start of the year to 158.34p today.

However, rising prices in mainland Europe where the Dutch pig price has now hit a record £2.00/kg and the German producer price shooting up by 60 cents following last week’s 40 cent rise, this now stands at €1.95, which is equivalent to 167.5p in our money and 10p higher than our SPP.

Weekly contribution prices are expected to rise by up to 3p today and it is good to see some forward movement in this sector, with producer prices starting to follow global trends more closely than they have been.

Most spot bacon buyers had just about enough pigs to go around, but all the signs are that the UK spot price which is currently around 160p should continue to improve in the weeks ahead.

Cull sow values are also reacting to the worldwide shortage of manufacturing pig meat and although the Euro itself has remained very little changed, trading on Friday at 85.92p, all sow values have gone up in the region of 4p/kg with most traded in the 111-116p range according to load size.

Weaner values are continuing to rise mainly due to their linkage with the SPP, with the latest AHDB 30kg unquoted but average estimated to be in the region of £55/head and 7kg values have also continued their upward progress rising by 38p to £40.86/head.

For those out there with strong nerves and amenable bank managers, there are significant opportunities to benefit from rising finished pig prices in the months ahead, at a time when feed costs are relatively manageable.

Feed ingredient prices have generally stayed at similar levels with December feed wheat traded at £148/t and September 2020 at £157/t.

Feed barley futures prices are at a discount of between £15-20/t and look good value, with December futures quoted at £131/t and September 2020 at £142/t.

Proteins continue at similar levels with Hipro soya quoted at £296/t for December-April 2020 and £295 for May-October 2020. Rape meal values have also been easing and now stand at £189/t for December-January 2020 and £195/t for February-April 2020.

However, as many producers know to their cost, fluctuations in currency values or climate related problems can play havoc with feed costs and opportunities to lock into favourable prices should not be missed.

Finally, once again the ASF epidemic continues to spread through wide swathes of the Far East with reports of some major culls being carried out not only in China, the latest of which has been identified in East Timor, which is a near neighbour of Australia, where urgent steps have been taken to ramp up their biosecurity barriers against the further spread of the disease to Australia or New Zealand at a time when it looks as though an effective vaccine for ASF will not be available for at least another five years.

Although benefits are available to those involved in pig meat exports let us hope this scourge does not spread any further, especially in our direction or it could be “lights out and good night” for the UK pig industry if that happened.

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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