Peter Crichton’s commentary for January 16, 2015

It was more of a grey Friday than a black one, but still a tough day for sellers in all departments and the only slight bright spot on the pig production horizon are reported falls in feed prices.

Pigmeat, however, proves to be a difficult commodity to shift, especially when compared with relatively buoyant cattle and sheep prices, so at this stage at the start of the year, the pig industry as a whole is very much the poor relation of the remainder of the meat production cycle. A 70kg cull ewe is now worth much more than a 250kg cull sow!

With the SPP continuing to drift, dropping another 0.74p to stand at 141.70p (the DAPP a year ago was worth 168.99p) and weekly contribution prices (formerly shout prices) also back by between 1p to 2p in the main, contract prices have inevitably taken another knock, but not such a hard one as spot sellers, who will have seen further reductions in bids for their pigs in the 2p/kg to 4p/kg bracket.

Although spot bacon has been traded in the 123kg-126p/kg range, at least one large operator was prepared to take reasonable numbers if producers would accept the price, which will clear some of the volume of live bacon pigs currently looking for homes.

However, it must be emphasised that the spot quotes referred to above relate to one-off loads rather than regular weekly supplies that are generally worth 3p to 5p more than their one-off counterparts.

There was more “trouble ‘t mill” in the shape of sharp falls in the value of the euro due to the Swiss gnomes deciding to remove something called the euro cap, which sounds more surgical than financial, with the result that the Swiss franc soared in value at the expense of the euro, which traded on Friday worth 76.1p, representing a drop during the past seven days of 2.7%. As a result, imports were that much cheaper and our pigmeat exports were also worth 2.7% less than they were a week ago.

Although cull sow values in mainland Europe have remained at largely similar (but despondent) levels, the currency change alone resulted in the two major UK cull sow abattoirs dropping their bid prices by 2p, which means that it takes a good sow to be worth any more than 60p/kg, which represents a 40% drop on the 100p/kg available 12 months ago.

Although the latest AHDB 30kg weaner price of £47.80 represents a significant improvement on the previous week’s figure of £44.38, some sellers are suggesting that the latter figure might have been affected by Christmas/New Year gremlins, but weaner producers are still finding it hard to match COP levels and this trend is also reflected by further reductions in the 7kg weaner average that now stands at £34.38.

However, on the basis that finished pig returns normally improve from March onwards, now might be a good time for finishers to “invest” in some weaners, especially with feed prices displaying a more bearish tone.

As reported, spot ex-farm feed wheat prices are showing a significantly easier trend, with the latest HGCA spot feed wheat ex-farm average quoted at £123.10/t compared with £128.60/t last week. Futures prices were also highlighting a similar downward trend with January trading on the LIFFE market at £126.25/t and July at £130.70/t, which represents a four-week low.

According to the people who know about such things, recent USDA returns are showing higher than expected global cereal stocks; and on a more local basis, UK feed wheat users and buyers are tending to buy spot rather than taking forward positions, which is also contriving to push down futures prices.

Proteins are also showing a slightly easier trend, with reports of bumper harvest prospects in the Southern Hemisphere, with Hipro soya traded at £335/t ex-East Coast store.

And finally, the deadly threat of PEDv continues to move closer to EU borders, with reports of further outbreaks (yet to be confirmed) on the western Polish border (near Germany, in case you wondered) and further outbreaks may have moved much closer to the Ukraine’s border with Poland (subject to confirmation).

Once again, pressure needs to be put on the UK Government to do everything it can to improve biosecurity levels at ports and any other entry points for people, live pigs and pigmeat. No doubt the politicians will soon be too absorbed in trying to work out who’s going to lose the next election to bother with this.

> 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:

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