A further rise in the SPP, which went up by 0.39p to 200.48p, is certainly a step in the right direction but there is still a long walk ahead until producers are back in profit.
The shortage in pig numbers throughout the UK and EU is continuing to lift prices with the influential German producer price levelling up at 2.00 EUR, although imported pig meat continues to undercut our domestic market to a significant extent.
The spot market has suddenly woken up to the fact that tighter pig numbers mean better prices for producers with spot baconers much easier to sell with prices in the main between 205p and 210p/kg, which is a country mile ahead of the SPP.
However, little of this seems to have filtered through to UK weekly contribution prices where the major players are still holding their bids between with 180p/kg from Woodheads, 178p/kg from Cranswick and Karro bringing up the rear at 165p/kg, but according to industry sources contribution prices seem to be more of a liability than an asset and it may soon be a case of RIP!
Cull sow prices continue to reflect better demand from a dwindling supply throughout the UK also helped by further increases in the value of the Euro which traded on Friday worth 88.1p compared with 87.73p seven days earlier.
As a result most cull sows were traded between 86p – 91p/kg and hopefully the current European wide pig price recovery will continue to be maintained and some producers will be able to begin to breath a little easier after an annus horribilis since the start of 2022.
Weaners are also continuing to reflect a generally more buoyant feeling and in a number of cases RSPCA Assured 7kg weaners are now well ahead of £50/head.
30kg spot weaners are also receiving more attention from buyers, but still have a fair way to go before fifty shades of red become black.
Feed Market Trends
The gap between grain prices over the past twelve months has narrowed to some extent with spot ex farm feed wheat traded at £229/t compared with £217/t a year ago.
Grain futures prices are generally operating in pig producers favour than previously with January 2023 feed wheat quoted at £244/t and next September at £233/t.
Feed barley values are also following a similar downward trend with January 2023 quoted at £224/t and September at £216/t.
Protein values have however remained at relatively high levels with Hipro soya for January 2023 delivery valued at £524/t and for May – October 2023 at £479/t. Rapemeal also remains fairly expensive with May – June 2023 deals agreed at £312/t.
Although there are reasons for optimism the UK pig industry still has a mountain to climb in terms of production costs, which are still well ahead of pig values, shortages of suitable staff and the ever present risk of African Swine Fever and other biosecurity challenges.
Hopefully for those pig producers who have been able to sustain negative margins over the last eighteen months or so, further improvements in pig prices and reductions in feed costs can not come soon enough during a period which has seen the UK pig breeding herd population fall by over 15% over the last twelve months.
Hopefully the financial situation will continue to improve and also encourage better demand for UK pig meat which is produced to much higher standards than elsewhere in the world.
Plenty of challenges ahead but at the same time a big thank you to everyone involved in pig production. In the meantime, Merry Christmas to you all.