There are some further modest signs of life as far as the UK pig industry is concerned, and although the SPP took a downward step, losing 0.26p this week to stand at 112.55p, slightly more demand for spot pigs continues to reflect the trend of fewer numbers in the pipeline. Most contract abattoirs, however, had enough to meet next week’s requirements.
As a result, spot quotes tended to be about the 110p/kg mark for one off loads, although regular sellers were generally able to achieve slightly better returns than this.
Weekly announced contract bacon prices, which often form part of the overall price matrix, were showing modest increases in some cases, but as with spot quotes, we need to see rises of at least another 10p to 15p/kg to put most producers back into profit (remember that word?).
Uncertainty about which way the UK economy is heading if Brexit occurs has reflected in a weaker pound. But, as every cloud has a silver lining, a resurgent euro helped to put a further 2p/kg on to cull sow prices, with the euro worth 80.72p at noon on Friday, compared with its value of 80.14p a week ago.
As a result, cull sow quotes tended to be in the 58p to 60p/kg range, but UK cull sow returns still seem to be out of step with prices in mainland Europe so, in school report terms, UK cull sow prices “could do better”.
If sow numbers start to tighten we could see something of an improvement in cull values at a time when producers who’re looking to replace unproductive sows with gilts are having to sell two sows to buy one gilt, rather than the other way round, which used to be the pattern.
Although the latest AHDB weaner prices are still painting a fairly dismal picture, with the 30kg ex-farm average slipping to £35.86/head and 7kg weaners averaging £28.64/head, the number of weaners looking for homes seems to have dropped slightly, with one or two of the larger buyers back in the market looking to fill up empty pens, which could point to a modest turnaround in weaner values on the weeks ahead. But, with most 7kg weaners costing between £28 to £30/head to produce, and 30kg weaner COP levels in the £41 to £45/head bracket, there’s still a long way to go before the figures on pig breeders’ profit & loss accounts can be changed from red ink to black.
Cereal prices have shown very slight gains this week, with spot wheat traded at £101.10/t and futures prices also a touch firmer in places with May feed wheat quoted at £106.30/t. November, however, looked relatively more expensive at £109.80/t, and for those thinking ahead to 2017, May is quoted at £126.45/t.
UK winter cereal plantings for the 2016 harvest are at a three-year low, but if this pattern is repeated across much of Western Europe we could see a further hardening of cereals prices, which will do nothing to help pig producers’ margins.
And finally, there’s good news that Asda has pledged to increase its fresh pork intake to 80% British within the next 12 months. It would be nice to see similar undertakings made by other retailers that may be lagging behind on this front, but it remains very much a case of “use it or lose it” as far as British produced pigmeat is concerned.
And finally, finally, the names of a couple of runners in the Grand National tomorrow include Many Clouds and Rocky Creek, and reflect all the problems that face the pig industry. Let’s hope they don’t turn out to be a sign of things to come.
