Although the SPP continues on its upward track rising by a further 0.35p to stand at 200.72p, UK weekly contribution prices are unfortunately continuing to move in a downward direction.
It was certainly something of a Black Friday for finished pig sellers with all three of the major players dropping their weekly price with the list of runners and riders now reading as follows – Woodheads down 3p to 182p/kg; Cranswick down 2p to 178p/kg and Karro bringing up the rear dropping by 2p to 169p/kg and painting a fairly grim picture for contract pig prices in the run up to Christmas.
According to trade sources, the main reason for falling finished pig prices is the fierce competition from imports, but on the plus side, German prices rose by 5 Cents with the latest influential German producer price quoted at 1.95 EUR, which is equivalent to 167p/kg in real money.
The spot market has also had a lacklustre week with some of the smaller fresh meat wholesalers complaining that retail demand is weak with consumers shopping according to tight household budgets with the result that meat sales have stalled.
Spot bacon quotes were reported in the 184p/kg region but a country mile from the SPP. Although reports are indicating that live pig availability in the UK is continuing to shrink, this has yet to have much influence on the overall market, but by next spring there will be a big black hole in pig numbers.
Cull Sows
For those producers who are being forced out of business due to the financial situation, at least cull sow prices are at better levels than they have been for a while with most traded between 76p – 80p/kg, but not helped by a weakening Euro which slipped from 86.90p a week ago to 86p today.
Weaners
Those weaner producers fortunate to have cast iron contracts tied to the SPP are benefitting to a significant degree compared with the situation being faced by finishers where, according to the latest AHDB figures, producers of finished pigs are still losing in the region of £33 per pig produced, which is unsustainable unless a combination of better finished pig prices and declining grain costs comes to their rescue.
Feed Market Trends
On the positive side, feed ingredients are tending to ease in value to some extent but are still far too high for pig producers’ budgets with the UK ex farm spot feed wheat weekly averaging £244.30/t.
Grain futures prices are however reflecting slightly easier trends with feed wheat for December delivery quoted at £253/t and for September 2023 at £241/t.
Feed barley is also easing with December traded at £236/t and for September next year at £225/t.
Protein values are coming off the boil too with Hipro soya for December – January 2023 delivery at £482/t and May – October 2023 at £439/t. Rapemeal buyers for February – April 2023 delivery is quoted at £371/t.
And finally…
The main black cloud in the pig industry weather forecast remains the rock bottom pig meat prices being quoted by importers.
How EU pig producers manage to keep the wheels turning is something of a mystery, but it is playing havoc with the whole pig meat supply chain at a time when UK pig producers need all the help they can get.
Unless the situation changes the outlook for the industry is black for the immediate future, despite a shortage of live pigs in the system.
