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Peter Crichton

Peter Crichton’s commentary for August 22, 2014

PW ReportersBy PW ReportersAugust 22, 20143 Mins Read
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Despite the challenges of a short week ahead, the meat inspectors’ partial strike and plenty of cheap foreign pigmeat on the market, spot bacon quotes held at generally similar levels on the week with 150p/kg representing a realistic base price and a copper or two more available in some regions.

The DAPP, unfortunately, continued to slide and lost another 0.93p to stand at 158.35p, which is 10p lower than its value at the start of the year.

With most contract prices tied to the DAPP, or other index figures, prices in this sector were inevitably lower on the week, and continue to suffer from the challenge of cheaper foreign imports, which have been helped by a further reduction in the value of the euro, which traded on Friday at 79.87p compared with 80.23p a week ago.

Despite the currency imbalance, cull sow prices have held at similar levels with the two main export abattoirs generally offering prices in the 92-94p/kg range according to spec, but the situation is not being helped by the ongoing Russian embargo against pigmeat and other food imports from the EU mainland.

The weaner market has been in something of a rollercoaster mode during the past few weeks, with the latest AHDB 30kg ex-farm weaner average recovering most of its surprise £4/head drop last week and now stands at £55.56/head. But 7kg weaners have taken a fairly sharp £2/head drop and are now £38.56/head.

The availability of cheap feed should, in theory, help to boost weaner values despite falling finished pig returns, but a lack of finishing space seems to be the main hazard the market has to face at present. As a result, spot 30kg weaners were generally traded around the £50/head mark and 7kg between £36-38/head.

With harvest drawing to a close and some bumper yields reported, UK grain prices continue to ease with the latest ex-farm feed wheat quote of £108.20/t, almost £50/t down on the same period 12 months ago.

Wheat futures prices on the LIFFE market staged a slight rally on Friday, with November closing at £122.05/t and May 2015 at £128.80/t

The European Commission has imposed import duties on maize, rye and sorghum for the first time for four years, which may help to put a base in the market, so this might be a time for pig producers to take some forward cover.

The oilseeds market also remains in a bearish mood with hi-pro soya quoted for August delivery on the East Anglian coast at £330/t and rape meal at £160/t.

Although there was a slight upturn in demand towards the end of the week, the focus remains on the current record production estimates for 2014-15, which should help to put a spring in the step of most pig producers.

And finally, pig producers should continue to be concerned over reports that are circulating about the import of live breeding pigs from the US, where PEDv is prevalent. This sounds to be about as dangerous as taking a holiday in the Middle East at present, but producers must remember that all the problems seen with Aujeszky’s disease, Blue Ear and TGE will be as nothing compared to an outbreak of PEDv.

> 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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