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Peter Crichton

Peter Crichton’s commentary for April 11, 2014

PW ReportersBy PW ReportersApril 11, 20143 Mins Read
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Despite two upcoming “short” weeks, prices have remained firm for all weights, helped by a slight improvement in the DAPP, which rose by 0.23p and now stands at 163.07p compared with 158.83p a year ago.

Spot bacon buyers quickly absorbed any pigs that were surplus to contract and were prepared to pay prices within the 166-169p range according to specification, which means that in round terms spot pigs were worth DAPP+5p, so contract prices still have a certain amount of catching up to do.

The cull sow market is also reflecting relatively stable demand throughout Europe, but it will be interesting to see the effect that soaring US pig prices have on the global cost of pigmeat following the PEDv disaster, which has hit many pig-producing regions in the US and Canada, as well as elsewhere.

It was alarming to read that the virus is so powerful that the contents of one medium-sized slurry lagoon could potentially be powerful enough to infect every pig in the United States, which is yet another reason why Europe needs to remain super-vigilant against an epidemic that takes few prisoners.

Sow prices have also held at recent levels despite the supply chain disruption caused by the Easter holiday and signs are emerging that when we return to normal working, demand could, if anything, improve.

As a result, most cull sales were traded within a fairly narrow 98-101p band, compared with 110p a year ago, but the euro was worth 85.40p then, compared with 82.91p today.

Weaner values have continued to reflect better margins within the finishing sector and the latest AHDB 30kg ex-farm weaner average has risen by just over £1.50/head and now stands at £56.89/head with 7kg piglets averaging £40.92/head.

Feed markets have enjoyed a relatively calm week, although the unsettled political situation in the Ukraine could put upward pressure on cereal prices. The latest USDA global wheat stocks forecast were higher than expected and maize production has also increased. Ex-farm feed wheat is trading virtually unchanged at £163.60 on a spot basis, with forward prices on the LIFFE futures market of £166/t for May and £155/t for November.

Some producers are reported to be taking longer-term feed positions up to two years ahead for a proportion of their requirements just in case things take off. This time last year wheat was trading on an ex-farm basis at £196.50/t.

And finally, not long now until the Pig & Poultry Fair which takes place at Stoneleigh on May 13/14, by which time (hopefully) most pig producers will have a slight spring in their step, providing nothing untoward happens between now and then.

Hopefully, biosecurity controls will be beefed up, just in case any of our (very welcome) overseas visitors forget to clean their shoes before they come!

> 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

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