Although today was a relatively quiet one for contract and spot sellers, signs are beginning to emerge of a shortage of pigs in the UK supply chain. Average weights seem to be dropping, and there are reports that some finishers may be unable to supply their full contact numbers in the weeks ahead, which could help to put upward pressure on prices. But at the same time, EU mainland pigmeat values are continuing to ease and still provide a very potent competitive threat to the UK market as a whole.
Although the latest SPP has dropped by 0.24p to 133.01p/kg, it’s hoped that this trend might be reversed in the weeks ahead, but we still have a long way to travel to match prices this time a year ago, when the SPP stood at 159.64p.
Spot demand was reportedly fairly limited, with little enthusiasm for more pigs except at similar money, with the result that most spot bacon quotes were in the 130p to 133p range.
Unfortunately, the euro is still not doing us any favours, trading on Friday worth 70.42p, which is worse that its value of 70.93p a week ago. And although cull sow buyers may have been tempted to clip a penny off the price, in the end stood on with quotes generally between 50p and 52p delivered.
Weaner prices are also continuing to show plenty of red ink, with the latest AHDB 30kg ex-farm average price dropping £45.45 to £43.85. And 7kg prices are also continuing to head south with the AHDB average of £32.87, down from £33.11 the previous week.
However, if a finished pig shortage does actually materialise, this could restore some confidence. With finishers who’ve had their fingers burnt for much of the year, but with bale carting in full swing, it was difficult to find buyers with much enthusiasm for spot weaners today.
Reports of potentially good cereal yields are helping to put downward pressure on prices, with the latest spot wheat ex-farm quote down to £106/t, although futures prices have remained relatively stable this week. November feed wheat has been quoted at £119.75/t and March 2016 at £122.95/t.
Any further reductions in feed prices will be welcomed by the livestock sector, and will be something of a lifeline at a time when margins for cattle, sheep and pigs are all under significant pressure.
And finally, some good news, with reports that the industry-promoted pulled pork campaign has led to an uplift in fresh pork sales, including added-value products, worth an estimated £7.8m following the first phase of the campaign.
Carefully produced advertising will be worth its weight in gold, and many of us can also cast our minds back to the Jamie Oliver effect we saw a few years ago.
Well-targeted advertising and promotional campaigns may well be needed this autumn and are another way in which we can hopefully keep the tide of cheaper, imported pigmeat from swamping us.
In the words of the late Arthur Daley (George Cole), perhaps this campaign will be a “nice little earner and the world will be our lobster”.