There have been no fireworks in the market, more of a damp squib as far as sellers were concerned. Despite the SPP moving up marginally to 127.11p, market sentiment remains on a downward track.
With plenty of pigs available and numbers soon being brought forward for Christmas, it looks as though, unfortunately, supply is going to match or possibly exceed demand, although there are, once again, some big kills taking place in the weeks ahead.
Weekly contribution prices, which form part of contract calculations, either stood on or eased back with the lowest now standing at 121p.
The spot market was extremely quiet with most buyers operating this sector having more than enough pigs without the need to go shopping for any additional numbers. The result was that most reports of spot trades were in the 121p to 124p/kg range for one-off loads, although regular sellers should continue to receive modest premiums of 2p to 4p/kg ahead of this.
However, if the current downward trend continues, we could see the SPP losing up to a further 0.5p/week until the end of the year, adding yet more downward pressure to producers’ profit & loss accounts or, as they now should be renamed, loss & no profit accounts.
Although the euro continues to trade at very low levels, it’s value on Friday pm of 71.24p was virtually identical to seven days earlier but, despite this, unfortunately the current surplus of pigmeat across the EU is continuing to have a serious impact on prices, with the result that UK cull sow quotes eased again and fell by 5p/kg with most bids in the 55p to 58p/kg range. This may also put a lid on it for those producers looking to replace worn out sows with gilts.
A wide gulf remains between contract and spot weaner prices, but the overall AHDB averages, which include spot and contract categories as well as Freedom Food and Red Tractor, are continuing to drift lower, with the 30kg ex-farm weaner average now standing at £43.03/head and 7kg weaners have hit a new low point of £31.79/head.
Those weaner producers with contracts should keep them in a very safe place, because there’s a gap of between £3 to £6/head opening up between the equivalent spot and contract quotes.
Reports are also filtering through of some major weaner buyers looking to reduce their contract prices, possibly in return for a longer supply period but, once again, it tends to be the primary producer such as the breeder who will suffer most of the knocks that are passed back through the whole supply chain from the retail sector.
The cereal market has remained generally quiet with many pig producers opting to buy month-to-month rather than taking fixed positions, which up to now has probably paid dividends, although there are reports that drought-affected Ukrainian wheat production could fall by a third for the 2016 harvest due to the poor condition of crops heading into the winter period.
Black Sea feed wheat is, however, almost on a par with UK export wheat prices, which is helping to keep values at lower levels for the time being, with UK spot feed wheat quoted in the Farmers Weekly at £103.60/t.
And finally, in the words of a certain Monty Python song “Always Look on the Bright Side of Life”. Hard-pressed pig producers were able to forgive and forget at two award ceremonies in London on November 4, with Andrew Knowles named as the worthy winner of the David Black Award, and later in the evening at a glittering “Pig Oscar” ceremony with 370 guests attending the 2015 National Pig Awards at the Royal Garden Hotel, Kensington. For those of you who can remember what actually went on, I’m sure you’ll agree it was a great evening!
Particular congratulations to Jimmy Butler as the “big” winner of the Chris Brant Award for going the extra mile, and to all the other finalists and winners.
PS: I’m sure that if anyone had come up with the ultimate hangover cure, they would have made good money from certain people (you know who you are) on Thursday morning!