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Peter Crichton

Peter Crichton’s commentary for June 27, 2014

PW ReportersBy PW ReportersJune 27, 20143 Mins Read
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It was another routine trading day, with contract prices easing back in line with a reducing DAPP, which this week slipped by 0.44p and now stands at 163.71p/kg, which is exactly the same level as it was three months ago.

The APP announced for the previous week was 165.8p, which is 1.65p higher than the DAPP for the equivalent week.

Spot buyers commented that loins have been hard to clear, coupled with increasing volumes of foreign pigmeat, which currently enjoys a discount of some 20-25p/kg when compared with the UK equivalent and is hitting demand for UK producers.

As a result, spot bacon buyers were generally bidding in the 163-166p range, and although pig numbers are still relatively tight, the slightly unsettled weather forecast, coupled with the “Wimbledon strawberries” syndrome, meant that demand remained generally subdued across the board. (For those of you who remember the late Ray Pilgrim, this was a phrase he trotted out every year, but was often proved correct!)

The euro ended the week marginally higher, worth 80.05p, but it was pleasing to see that cull sow prices are continuing to maintain recent gains, with prices for next week up a further 2-3p and most cull sows traded in the 95-97p/kg range.

Reports from Europe indicate, however, that if the Russians could be persuaded to lift their ban on importing pigmeat from any EU mainland countries, this could soon lead to a significant upwards sow price correction and could help some of the large volumes of EU pigmeat in cold store to go back into the supply chain.

The weaner market also appears to be suffering to some extent from producers’ concern over falling finished pig prices, despite the benefits of much cheaper feed. This time last year wheat was traded at £164/t ex-farm, compared with little more than £142/t for old crop today.

The latest AHDB 30kg weaner average has eased to £55.89/head, and 7kg weaners have also taken a drop, quoted at £40.75/head.

Cereal futures markets have also ended a relatively quiet week on a bearish trend, with July feed wheat quoted on the LIFFE market at £140/t and January 2015 £139.45/t. Off-the-combine prices for new-crop wheat are likely to be little more than £130/t, with barley looking exceptionally good value at £20/t less than this this.

And finally, still on the feed front, reports are emerging that the introduction of poultry meat and bonemeal in pig feed and vice versa may be on the cards now that a test has been devised to distinguish meat and bonemeal from fishmeal.

According to the NPA, the European Commission remains committed to the reintroduction of non-ruminant processed animal proteins in pig and poultry feed, but stringent tests will be necessary to avoid any inter-species cannibalism.

Processed animal protein is less likely to be included in British pig diets at this stage, but its reintroduction in Europe might help to relieve price pressure on other protein ingredients. We shall see.

> 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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