Although the latest SPP took a sharp upward jump rising by 4.78p to 171.61p, unfortunately events in Ukraine are continuing to drive cereal and protein prices even higher.
EU pig meat prices have in the main stood on, but imported pig meat from the EU continues to undercut UK prices, with Belgium loins available as low as £2.50/kg, according to some reports.
To rub salt into the wound, these imports are in many cases being waved through by HMRC at UK ports without any significant inspection procedures posing a massive financial challenge to pig producers as well as the added risk of bringing ASF to these shores.
UK weekly contribution prices have in the main remained at the same level as a week ago and they could certainly do with a dose of levelling up, with the big players holding their prices between 168p and 190p, which is a country mile behind where they need to be to put producers back in the black.
UK spot bacon pig prices are even more adrift with deals agreed in and around the 145p – 150p/kg range, which is over 20p lower than the SPP.
Thankfully, last week’s increase in the SPP has helped to lift the values of weaners sold on an SPP matrix, with 7kg RSPCA Assured piglets trading in some cases over £40/head on contract, but spot prices still remain very low with finishers reluctant to commit until they have a clearer idea of production costs going forward.
Soaring feed prices continue to cause high levels of concern for the whole pig industry with feed wheat quoted at £342/t for June and only marginally less at £340/t for September.
UK ex farm spot feed wheat values have shot up with the latest average quoted at £327.80/t.
Feed barley futures prices also remain extremely bullish with June traded at £316/t and September even dearer at £326/t.
Protein prices are also at unsustainable levels as far as pig farmers are concerned with Hipro soya for June – October delivery at £458/t and longer months saw May – October 2023 quoted at £449/t. Rapemeal prices have eased by a gnat’s whisker with June – July at £390/t and August – October at £325/t.
And finally, although some producers may have returned from this year’s Pig Fair with a slight skip in their step, others are limping from the massive financial challenges being faced with no let up in surging production costs and a big black pig supply hole is already opening up, reflecting the number of producers who are leaving the pig industry.
However, there appears to be a large measure of agreement that the whole pig pricing mechanism needs a thorough overhaul and we should move from a cost minus basis to cost plus as proposed by Steve Ellis Karro’s CEO, to try and restore some liquidity to the system before more units are closed down and herds culled.
However, unless there is a rapid reversal of the current situation and meaningful financial contributions from the processing and retail sectors, more producers will be left with empty pockets and a bleak future.