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Comment

Nothing has changed…

Simon KingBy Simon KingOctober 26, 20183 Mins Read
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Very much a case of “as you were” with prices remaining at generally similar levels and the influential German producer price holding at €1.36, although the SPP continues its downward track, losing another 93p to stand at 145.37p.

Most weekly contribution prices are forecast to remain at similar levels within the 132-137p range and spot buyers had another quiet week although the onset of colder weather could suppress pig growth rates and stimulate human appetites but where there were any spot trades these tended to be in or around 140p.

An improvement in the value of the euro, which traded today worth 88.69p, encouraged cull sow bids to inch up by a penny although mainland Europe pig meat prices still remain at similar levels with culls now worth in the 62-64p range but these are still 10p per kg adrift of their value a year ago.

The weaner market continues its roller coaster ride with the latest AHDB 30kg average dropping by £4.62 to £47.54/head and the 7kg average price also slipping by a smaller amount to average £36.92/head.

Red Tractor weaners remain very hard to place at anything other than giveaway prices with little space in the system or enthusiasm from buyers and although demand for Freedom Food weaners by comparison remains reasonably firm, but margins are under pressure in this sector too.

UK protein prices are also a tad firmer with 48% soya meal traded ex Liverpool at £327/t and 34% rape meal ex Kent at £208/t. One slightly encouraging trend is news that UK wheat futures are on the slide on a domestic and global basis, with November UK wheat trading around £175/t mark earlier in the week but falling to £170/t by close of play today.

More distant wheat futures also saw November 2019 traded in the £159/t region which is their lowest level since June.

With recent reports that the latest cost of production figure produced by AHDB is in the region of 150p this will strike a certain amount of concern to producers who are in nett terms banking little more than 140p/kg for bacon pigs after deductions, leaving them up to 10p on the wrong side of the profit and loss account.

And finally, reports that the UK pig herd had increased by 1% to 5m head may also do nothing to help on the supply and demand front unless consumers can be persuaded to switch their attention to the pork counters in the run-up to Christmas.

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Simon King

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