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Peter Crichton

Peter Crichton’s commentary for December 18, 2015

Peter CrichtonBy Peter CrichtonDecember 18, 20153 Mins Read
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Although Christmas is a time for giving as well as taking, the seasonal period looks like it’s going to see producers taking a hammering on the price front, and for those who’ve been driven to drink it’s a sobering thought that this time last year the SPP stood at 144.65p compared with 125.16p today; the euro was worth 79.38p but now stands at 72.82p, although that’s marginally better than its value of close to 70p in mid-November but, looking on the slightly brighter side, ex-farm feed wheat is trading at £103.50/t as against £127.40/t 12 months earlier.

Although large numbers of finished pigs have been pulled forward during the past few weeks, there are still plenty in the pipeline and may cause problems after the Christmas and New Year break is over, unless we see a closing of the gap between UK and EU pigmeat prices, but it looks more likely that the UK price will shrink rather than any significant improvement take place in mainland Europe pigmeat values.

Weekly announced prices, which form part of many bacon pig contracts, also took another downward step with falls of between 1p and 3p/kg, and those will a link to current spot prices will also still be heading south with very little demand in this sector. Most spot buyers have already got enough pigs from regulars to avoid going out into the market to buy any more.

A further slight improvement in the value of the euro, which traded on Friday afternoon worth 72.82p, and news that German pig prices had stood on at least ensured that cull prices held at their current (very low) levels with quotes in and around 50p/kg compared with 70p/kg this time last year.

The weaner market continues to suffer from finishers’ concerns over the value of bacon pigs in the late winter/early spring period, although the AHDB 30kg ex-farm weaner average actually improved by £2/head to £41.89/head, whereas 7kg piglets continue to slide and now stand at £30.23/head although, curiously, if there is a brighter future for finisher prices this is more likely to filter through to the 7kg weaners rather than their 30kg counterparts.

At least the grain markets are remaining more bearish than bullish and this sentiment has been helped by higher than average 2015 crop yield estimates with the wheat output to 16.4 million tonnes, which is the fourth largest harvest on record, reflecting the favourable crop growing conditions for harvest 2015.

Early days yet to predict UK and EU 2016 yields, but early indications are that, apart from in those parts of the country which have suffered from Monsoon like weather conditions, 2016 crops are generally looking in fairly good order at this stage,

UK grain futures prices have ended a fairly uneventful week with January 2016 traded at £111.75/t and longer months such as July 2016 at £118.20/t.

Some more small savings in pig rations are reflected by further falls in hi-pro soya traded at £247/t ex-East Coast stores representing a decrease of £5/t during the past seven days and UK rape meal ex-Erith lost a significant £7/t to trade at £139/t last Friday.

And finally, strong words from the NPA about certain retailers that were quoted as offering an abysmal selection of British Gammon this Christmas, with Asda being named as the worst offenders in the villains section and Waitrose, M&S and the Co-op all remaining heroes in the NPA GammonWatch Surveys.

So it looks as though there’ll be very few pig farmers singing “tidings of comfort and joy” this year!

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Peter Crichton

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