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Peter Crichton

Peter Crichton’s commentary for May 6, 2016

Peter CrichtonBy Peter CrichtonMay 6, 20163 Mins Read
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As the Pig Fair approaches, there may be one or two faint smiles here and there as pig prices continue their recent improvement. But there’s still a long way to go before most producers get out of the red ink, which they’re still well and truly covered in.

The SPP put on a modest 0.3p and now stands at 113.79p, and spot bacon weekly contribution prices also improved with prices generally up by 1p to 3p, and between 112p and 116p/kg in the main.

Spot bacon buyers were, however, significantly more active, and one or two are still looking for pigs to cover the second half of next week. There were very few trades reported at less than 114p/kg, with most in the 116p/kg region. One or two sellers are hoping to hit  120p/kg within the next week or so.

According to fresh meat traders, the improvement in demand is mainly due to better weather ahead and the prospect of barbeques being fired up, as well as in the catering trade, rather than any particular shortage of pigs. There are, however, also signs that numbers are not quite as plentiful as they were a few weeks ago.

Although German pig prices have moved up in the region of four cents, this is mainly because of the barbeque trade, with the rest of the pig still hard to sell to manufacturing buyers. As a result, cull sow prices have only moved up by a modest 1p – 2p with bids in the region of 57p to 60p/kg, helped to some extent by a modest improvement in the value of the euro, which has risen from 78.35p in value seven days ago to trade at 79.08p today.

The latest AHDB 30kg ex-farm weaner prices are also starting to indicate an improvement in values, rising by almost £2/head to £39.19/head, although the 7kg average has slipped by £1 to stand at £28.52/head.

Grain prices have remained on something of a plateau this week, although US wheat status reports suggest a positive yield potential, which may add some downward pressure. LIFFE futures prices saw May feed wheat quoted unchanged at £107/t, with November a shade easier at £116.50/t compared with spot wheat that’s currently trading on an ex-farm basis at £102.50/t, but it’s still relatively hard to find many sellers at this level.

And finally, there was possibly some good news on the labelling front, as in a week’s time MEPs are due to make another appeal for actual origin of labelling of processed meat to fight food fraud and improve consumer confidence. This approach is being led by the European Parliament’s Environment Committee, and their supporters, who oppose the voluntary approach originally proposed by Brussels and are saying this could confuse consumers . . . too true!

If it says “Yorkshire Ham” on the label, then most consumers would believe the product was born and raised in Yorkshire and not somewhere on the other side of the English Channel!

And finally finally, the Pig Fair also provides us all with a two-year wake-up call as far as our precious industry is concerned. And as one of my readers, Simon (you know who you are) Guise, pointed out, in May 2014 the DAPP (SPP) stood at 164p and is now about 113p, a drop of 51p x 83kg = £42.33 per pig . . . ouch!

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