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Peter Crichton

Peter Crichton’s commentary for March 14, 2014

PW ReportersBy PW ReportersMarch 14, 20142 Mins Read
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Despite all the warnings earlier in the year from processors and “Beware the Ides of March”, prices have started to improve as numbers get tighter.

Although the DAPP dropped another 0.2p and now stands at 162.88p, spot prices are starting to travel in an upward direction with bids of 2-4p/kg up on the week and spot bacon traded in the 165-167p/kg region.

Signs of a modest pigmeat price revival in Europe were reflected in the cull sow market with bids of generally plus 2p, with most now traded in the 98-100p/kg range, also helped by a slightly firmer euro, which traded on Friday worth 83.74p compared with 82.93p a week ago.

30kg weaner prices are showing an easier trend with the latest AHDB 30kg ex-farm weaner average dropping from £57.44/head to £56.66/head. 7kg piglet prices have shown much sharper falls dropping from £41.47/head to £39.84/head.

These price reductions are reflecting rising feed values, which account for more than 60% of pig production costs, with the cereal market disrupted by the political situation in the Ukraine as well as dry US crop growing conditions.

As a result, March LIFFE feed wheat quotes have touched £167/t with July even dearer at £169.50/t.

Ex-farm UK spot wheat prices have also risen sharply with the latest quotes almost matching futures prices of £166.80/t.

Cereal markets will remain more volatile unless there is a rapid solution to the Ukraine problem, and those producers who had already got forward cover before the trouble started to brew probably made the right decision.

However, a return to normal service in the Ukraine region could see prices come off the boil and producers should keep a close eye on the markets before making any further feed buying decisions.

> 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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