Supply and demand in step… and a competitive spring ahead?

Supply and demand are (almost) marching in step, which is better than the usual ‘feast or famine’ situation we often see in the pig industry.

But, if anything, forward numbers appear to be on the tight side and if this coincides with a seasonal early spring improvement in demand, we could have a competitive few months ahead of us.

Although the SPP eased for the fifth week in succession, it has only dropped by an overall total of 1.58 when compared with its mid January peak and still stands at a very respectable 149.66p.

Weekly contribution prices have in the main stood on within a range of 145p to 150p/kg plus various bonus payments and although spot demand was reported to be quiet very few pigs were heading in that direction, with most sold on contract and to some extent the value of spot pigs will depend upon who makes the first phone call… buyer or seller? Spot bacon values were generally in the 147p – 152p/kg range according to spec.

Cull sow values have also held at similar levels reflecting a relatively static Euro, which traded on Friday worth 85.78p, which is a gnat’s crotchet higher than its value last week of 85.25p.

As a result, cull sow quotes have remained within a fairly narrow 91p – 94p/kg band with the two major export buyers active in the market.

For those of you with memories longer than a goldfish, this time last year cull sows were worth 56p/kg; the SPP stood at 112.89p; spot pigs were, in some cases, trading at less than 100p/kg; and the whole trade was reflecting something of an Armageddon situation with some producers saying, “I’m a getting out of here!”

Weaner prices are continuing to improve reflecting further shortages in the supply chain as well as a significant amount of spare finishing space, with the latest AHDB 30kg ex farm average price up by £1.62/head to £56.60/head and 7kg piglets also rose by £0.81/head to stand at £39.63/head.

But, once again, spot weaners remain in extremely short supply with a significant premium above most contract related prices, which is exactly the reverse of the situation this time a year ago when spot weaner prices fell like a stone and contracts were worth their weight in gold……what a difference a year makes.

With global crop stocks still at extremely high levels, cereal markets saw little change during the week with ex farm UK feed wheat quoted at £141.80/t and futures prices saw March 2017 traded at £146.55/t and July at £149.80/t.

UK protein prices have improved a shade with 48% Brazilian soya meal quoted ex Liverpool at £342/t.

Although pig prices are relatively buoyant and likely to remain so for the first half of 2017, according to the latest AHDB Pork Outlook Report production might recover in the latter part of the year and the biggest challenge in the market may come from China where, despite strong domestic demand (around 60% of all the meat being consumed there comes from our friend the pig), increased production in Russia, Brazil, the US and Canada could put downward pressure on the global market later this year.

And finally, a reminder that Malcolm Easey’s funeral takes place at 12 noon tomorrow, Saturday 18th February, at Horham Baptist Chapel, Suffolk, IP21 5ER.

There is sure to be a huge turnout and a chance for us all to celebrate the life of a remarkable man as well as mourning his passing.

The reception will be held afterwards at the Bull Auberge, Yaxley, IP23 8BZ.

The family requests that mourners should wear something colourful.

No flowers please. Donations to the RNLI and Macmillan Cancer Support c/o Rackham’s Funeral Services, 43 Stanley Road, Diss, IP22 4BN

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About The Author

Editor of LBM titles Pig World and Farm Business and group editor of Agronomist and Arable Farmer. National Pig Association's webmaster. Previously political editor at Farmers Guardian for many years and also worked Farmers Weekly. Occasional farming media pundit. Brought up on a Leicestershire farm, now work from a shed in the garden in Oxfordshire. Big fan of Leicester City and Leicester Tigers. Occasional cricketer.