Stayin’ Alive

Unfortunately the gap between feed costs and pig values is still far too wide and on a traffic light basis, producers need to see green for go as far as pig prices are concerned and red to stop rising feed costs.

The SPP is continuing to make upward progress, with a further 1.05p added to last week’s index price, and it now stands at 152.79p.

This has followed a trend of rising pig meat prices across the EU, where the influential German producer price put on another 3 Cents and moved up from 1.54 EUR to 1.57 EUR.

UK weekly contribution prices cover a wide range of values with some up by 3p at 161p and others standing on at 145p – 146p, but the message to producers is to keep on top of their weights at a time when some of the major abattoirs are suffering from Brexit-related labour shortages in their processing plants and HGV staff.

Spot bacon prices have remained at generally similar levels with reports of extra supplies of non-Farm Assured pigs hitting the market at around 140p, which has put the lid on any significant price rises in this sector, but those producers with finisher contracts safely locked away should to some extent be insulated from this.

Cull sow prices have always provided a useful barometer for the health or otherwise of the EU pig market and although they are still at historically low levels, it was good to see UK cull sow exporters put a couple of extra pence on the table with most quotes close to the 70p/kg region. But numbers are reported to be on the light side, with some producers retaining older sows rather than culling them at low values.

Replacement gilts are looking very expensive at in some cases up to 2.5 times the value of cull sows, but in the months ahead this may prove to be a false economy as herds get older.

At least there are no shocks in the currency markets with the value of the Euro hardly changed over the past seven days, worth 85.8p.

Weaner prices are continuing to reflect the yawning chasm between COP levels and pig values and, until this is corrected, the weaner market is forecast to remain relatively fragile with 7kg RSPCA approved piglets mainly between £35 – £37 per head and Red Tractor 30kg weaners £48 – £50 per head, with wide variations in price according to contract terms, but pig finishing spaces remain short.

In recent weeks feed ingredient prices were tending to pause for breath but have started to rise again with futures deals for July feed wheat agreed at £210/t and for September at £178/t up by £7/t over the past week.

Spot feed wheat is also moving higher with the latest ex-farm UK average rising from £194.90/t to £198.30/t.

Feed barley remains scarce with June quoted at £193/t and August at £165/t.

July – October Hipro soya traded at £357/t up by £9/t and £362/t for November – April 2022.

And finally, human and animal diseases continue to hog the headlines with reports that some of the Covid rules are being tightened which has moved Portugal into the amber sector putting many Britons holiday plans into the shredder.

However, looking on the positive side with more of the population staying at home and if the current balmy weather carries on, this will continue to stimulate BBQ demand to the benefit of producers.

Looking further afield, African Swine Fever has reached north east India and the Russians are reported to have culled 500,000 pigs following several large ASF outbreaks.

UK producers must continue to maintain the highest biosecurity on their units and if SDF reaches these shores, that could spell the death of the UK pig industry as we know it.

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About The Author

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