S.0.S

Pigs can be rather like policemen – they turn up when you don’t want them, and they are not there when you do!

On this occasion, we seem to be entering a period when supply is exceeding demand and as a result domestic pig meat prices are remaining under pressure although it is a relief to see that the influential German producer price has stood on at €1.47, which in our money is equivalent to 132p/kg but still undercuts the EU price by around 30p/kg in some cases.

As anticipated, weekly contribution prices are continuing their decline, with up to 2p/kg coming off in some cases with the result that most are now between 152-160p according to who you are and where you are. This is 6p lower (£4.50 per pig) down over the past 4 weeks.

The spot market is no place for the faint hearted. Most buyers are full with little space for producers who are not on contract with bids in 150-155p region, although regular spot sellers could generally achieve a slightly better return than this.

Cull sow values have yet to recover from recent lows but there are signs of fewer numbers being available which may help to lift UK demand although the EU sow market is still suffering from a major backlog of sows caused by the Covid-19 regulations which have greatly affected throughputs in parts of Europe and it may still be some while before the surplus is cleared.

UK cull export prices have generally remained in the 48p range not helped by a weaker Euro which traded down on the week at 90.33p.

Over the past 14 weeks, cull sow values have however taken a major knock and were traded at up to 125p in early April and are now 80p below this, equivalent to a drop in value of over £100 per sow.

For this reason, some producers have decided to continue holding their sows waiting for the European situation to improve in terms of volumes and hopefully prices will follow so the acronym S.O.S. (Sit on Sows) is appropriate!

Weaner prices have remained reasonably firm despite all of the challenges facing the industry with the latest AHDB 7kg average a relatively healthy £42.99 per head and the 30kg average is quoted at £60.05 per head.

Straw quality is reported to be indifferent as far barley is concerned. Volumes are also significantly down especially in the Eastern region, so it looks as though straw costs are likely to go up putting more financial pressure on producers.

Once harvest is out of the way we might see a little more activity amongst weaner buyers, but some are more concerned over which direction the finished pig market is heading and South appears to be the answer at present.

Feed ingredients remain at generally similar levels with UK feed wheat traded on the futures market for September at £167/t and barley at £135/t. Proteins have also held at slightly easier levels with August- October Hipro soya traded at £302/t and for longer months May and October ’21 changed hands at £295/t.

And finally, with the Brexit exit date getting ever closer, it is good to see reports that a National Food Strategy is being planned with the NPA supporting and welcoming this proposal to avoid undermining production and welfare standards in the UK.

Unfortunately sometimes money speaks louder than words and we will have to hope that on this occasion our producers receive a price which reflects the much higher welfare and production costs in the UK when compared to some other countries…we shall see!

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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