Although most people involved in the industry were expecting the SPP to move forward, for some strange reason it seems to have travelled in the opposite direction, dropping by 1.04p to 200.20p. Perhaps this mysterious ‘wobble’ will be remedied when next week’s SPP is announced… we shall see!
On the other side of the water, German prices have remained at firm stand-on levels, with the influential producer price quoted at €2, which in our currency works out at 176p and, as a result, it still remains very hard for UK pig prices to be competitive due to our much higher COP levels on this side of the Channel.
UK and EU pig numbers are continuing to tighten and this is reflected by spot bacon prices rising significantly with reports of up to 215p/kg being paid in some cases and the majority of spot deals on the top side of 205p/kg.
As far as UK weekly contribution prices are concerned Woodheads have stood on at 190p/kg, but at the time of preparing this report the Karro and Cranswick prices had yet to be announced.
Cull sow prices have remained strong, also helped by a slight improvement in the value of the Euro which traded on Friday at 88.6p compared with 88.4p seven days earlier.
Cull values have risen approximately threefold since January last year when the absolute rock bottom levels were little more than 28p/kg with the latest export prices generally between 87p-91p/kg, but unfortunately this has come too late in the day for many producers, who have already been forced to leave the industry because of its dire financial situation.
Weaner prices are continuing to flag up a shortage of pigs across the board due to major reductions in the UK breeding herd as well as low fertility levels following the scorching hot 2022 heatwave. Weaner pigs are now as scarce as hens’ teeth and, as a result, spot quotes for weaners are rising with demand exceeding supply in all categories.
As a result, a number of fatteners are now unable to find enough replacement pigs to fill their pens, which is music to the ears of breeders after a torrid twenty-four months or so of pig supplies exceeding demand. RSPCA Assured 7kg weaners are now in many cases selling well ahead of £50/head with 30kg spot weaners nudging up towards £65/head in places.
Feed Market Trends
Feed ingredient prices continue to fall with latest UK spot ex farm feed wheat weekly average easing to £221.20/t. This bearish trend is also reflected in the futures markets with feed wheat for February delivery quoted at £231/t, which is almost £10/t below its value seven days earlier.
Longer months saw feed wheat for September delivery quoted at £229/t and feed barley for February at only £10/t behind wheat at £219/t.
However, protein values are still unsustainable for pig producers with Hipro soya for February delivery at £566/t and October at £498/t. Rapemeal prices also remain bullish traded at £370/t for February – April delivery with May – October quoted at £320/t.
A revival in pig meat prices coupled with falling ingredient costs is providing the pig industry with a much more hopeful outlook for the year ahead – however, margins are still extremely tight and unless pig producers can move out of the red soon more of them could be heading for the exit door.