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Peter Crichton

Peter Crichton’s commentary for September 4, 2015

Peter CrichtonBy Peter CrichtonSeptember 4, 20153 Mins Read
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In school report terms, pig prices are still a case of “could do better”, although it was good to see the SPP take a slight upward step rising 0.21p to stand at 132.43p, but there still seem to be plenty of pigs about in relation to demand during a week that has been plagued by abattoir breakdowns, which meant that some pigs ended up being rolled.

However, with school terms starting and the holiday period well and truly over, demand tends to get firmer at this time of year, especially with better demand for legs to be put on one side for Christmas.

But fresh meat buyers reported high street demand to be on the quiet side, with the result that spot bacon was generally traded in the 130p to 132p/kg range and weekly (should be called weakly) announced prices, mainly in the 124p to 128p/kg range, remaining under pressure, with some processors cutting prices by a penny and the others (thankfully) standing on.

The earlier recovery of the euro seems to have almost fizzled out, although its value on Friday afternoon was 73.20p compared with 72.74p a week ago.

One of the only bright spots in the trade was much better demand for cull sows with prices nudging up by 3p or 4p/kg from 55p towards 60p/kg, and this came on the back of reports that the German pig price had also improved to the tune of 4.0 to 5.0 cents.

On a glass-half-empty basis, however, there’s still a long way to go before cull sow prices can recover to anywhere near their value of 95p/kg a year ago.

Weaner prices are continuing to fall, reflecting ongoing worries about finished pig prices this autumn, despite the availability of much cheaper feed, with the result that the AHDB 30kg and 7kg ex-farm weaner prices remain in retreat and are quoted at £41.21/head and £32.13/head respectively.

With feed prices continuing to slide, this must surely be a good opportunity for some finishers with a little bit of pluck to fill up with weaners, bearing in mind there may also be a greater availability of second-quality feed wheat in those areas where harvest is yet to be completed.

The latest Farmers Weekly spot feed wheat price has slipped again and now stands at £101.60/t and the futures markets are also continuing to reflect bearish trends with November feed wheat quoted at £111/t and March 2016 at £115/t.

Reports that Ukrainian maize and wheat exports during July and August were higher than in 2014 should also help to put downward pressure on EU cereal prices, but soya meal rose £5 on the week to £288/t (ex-Liverpool) on a spot basis.

Further uncertainty over China’s economic growth prospects has also hit global grain and oilseed markets, but there’s also a worry that the cash-strapped Chinese consumer may seek to cut their food budgets at the expense of pork.

And finally, the NPA is reporting that although supermarkets are displaying more British ham, sausages and bacon than two months ago, its latest Porkwatch Survey has indicated that fresh pork displays are down by 2%. The association has also picked out Aldi, Budgeons, the Co-op, M&S, Morrisons, Sainsburys and Waitrose as 100% loyal supporters of fresh UK pork – and the less said about Tesco and Asda the better!

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Peter Crichton

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