Peter Crichton’s commentary for August 16, 2013

A sigh of relief this week that none of the shout price buyers dropped their prices following Tulip’s lead to stand on, but it has to be said that the whole shout price system continues to lose credibility with weekly prices looking more and more isolated when compared with the rest of the market.

The latest shout price table remains unchanged as follows:
Gills, 166p/kg
Woodheads, 166p/kg
Tulip, 163p/kg
Karro, 159p/kg
Cranswick, 159p/kg
Unweighted Average Shout Price, 162.6p/kg

The spot market has remained firm and most buyers are operating at similar levels to last week with spot bacon worth anywhere between 170-175p/kg, but once the school holidays are over and normal life returns in September demand is expected to improve, which could lead to something of a spike in pig prices that are already running well ahead of equivalent levels a year ago. The DAPP is now standing at 168.05p compared with 150.43p in August 2012.

However, sellers will be quick to remember that wheat was trading at close to £200/t last August compared with £142/t ex-farm today.

Cull sow prices are continuing to reflect better European mainland demand following BPEX reports that European output is likely to drop by a further 2% in the months ahead, all of which should help pig prices to return to a more profitable level as far as producers are concerned. Cull sow quotes this week have been close to 130p/kg, with numbers still reported to be on the tight side despite recent falls in the value of the euro, which traded on Friday worth 85.32p, down from 86.06p a week ago.

Weaner prices have yet to fully reflect falling feed costs, with the latest AHDB 30kg ex-farm weaner average a shade easier at £53.58/head, but once straw carting has finished, and providing pig and feed prices continue to travel in the right direction, weaner values could continue to rise, especially for those finishers with an eye on the pre-Christmas market.

Futures prices for wheat on the LIFFE market are also painting a much more positive picture as far as pig producers are concerned with November quoted at £151.55/t and March 2014 at £154.60/t.

And finally, all in all the UK pig industry position in mid August is better than many would have settled for at the start of the year, but there’s still much disquiet over the flawed shout price system with many calls for this to be replaced or merged with a DAPP/spot element to provide a more accurate reflection of the current market in good times and bad.

> Suffolk-based Peter Crichton is an auctioneer 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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