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Peter Crichton

Peter Crichton’s commentary for February 13, 2015

PW ReportersBy PW ReportersFebruary 13, 20153 Mins Read
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Friday the 13th only proved to be something of a nightmare in certain sectors of the trade, but one glimmer of light was the news that cull sow quotes were up by 3p to 4p/kg due to firmer demand in mainland Europe after months of falling values.

Hopefully this will not turn out to be a blip, but it could be the first sign of an upturn in European pigmeat values, which often occurs on a seasonal basis from mid-February onwards.

Unfortunately, however, this failed to influence the lower end of the spot bacon market where prices have continued to fall with quotes in the 110p/kg area, but heavier and fatter pigs were traded at less.

For those selling on contract, unfortunately the SPP took another downward step and now stands at 137.72p compared with its opening value last April of 162.93p; unfortunately further falls are in the system due to ongoing reductions in contract prices, with further above-the-line deductions being fed into the system.

As reported, however, cull sow demand has improved with the result that most prices are now in the 59p to 63p/kg range, but are still 35p/kg below their value this time last year.

Weaner prices continue to be haunted by the indifferent outlook for finished pig values in the weeks ahead, although the AHDB averages showed a slightly firmer trend for 30kg pigs, which on an ex-farm basis are quoted at £45.92/head with 7kg to £33.53/head, but in both cases these are barely matching the cost of production.

Another slightly positive factor has been seen as far as feed costs are concerned with ex-farm feed wheat now quoted in the region of £116/t with futures prices also showing an easier trend, with UK feed wheat quoted on the LIFFE market for March at £121.65/t and November at £129/t.

If, however, the current volatile military situation in the Ukraine continues to deteriorate, or there are further weather-related problems elsewhere in this wide world of ours, we could see prices react accordingly.

And finally, some leopards never change their spots with reports that despite an overwhelming vote by MEPs that mandatory country of origin labelling for processed foods would improve transparency in the food chain, this seems to have been overruled by Brussels because it will “raise costs for food firms by 15 to 20%”.

Reading between the lines, it looks as though Brussels has been got at by large-scale food industry processors. How an extra label can cost such a high proportion of the total seems about as daft as recent proposals to hold the 2022 World Cup in Qatar!

> 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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