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Take it to the Limit

Peter CrichtonBy Peter CrichtonMay 7, 20204 Mins Read
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Another challenging week in the pig world is drawing to a close, with a hint of TGIAF (thank God it’s almost Friday) as far as pig marketing is concerned.

On the plus side, it was good to see the SPP go up by 0.05p to stand at 164.05p at a time when EU and global pig meat values are in many cases in a nosedive.

Weekly contribution prices had not at the time of preparing this report all been announced, but forecasts are that they will hopefully stand on within the 155p – 163p/kg range.

Despite a difficult week as far as abattoir breakdowns are concerned as well as slower throughput levels to comply with ‘working distance’ rules and staff shortages, most pigs have been sold without too much of a backlog building up, which has been very much more of a problem facing the US pig industry.

Spot trade remains reported as ‘quiet’ with supply and demand reasonably well in step and for the few spot deals that took place prices were in the 162p – 166p/kg range according to spec.

However with sharp falls in EU pig meat values, price cutting, imports are heading this way in growing numbers which is another reason for UK producers to keep on top of their weights and not leave too many extra pigs in the system if they can avoid it.

The worst bit of pig price news came with yet another reduction in cull sow values, which fell by 10p/kg two weeks ago, 16p/kg the following week and 19p/kg for next week, which works out at an overall loss for the three week period of £55 per sow, ouch!

Cull sow quotes have generally been above 72p/kg according to load size and for those who are prepared to haggle prices ahead of this figure have been achieved to the tune of several pence.

Fortunately, the value of the GBP has remained fairly constant with the Euro worth 87.32p today, compared with 87.58p seven days earlier.

Bearing in mind all the challenges facing the industry is was good to see that weaner values have generally held up reasonably well with the latest AHDB 7kg ex farm average only down by 8p to £42.50/ head and the 30kg average is £61.20/head.

However, with most weaner contract deals tied to the SPP in some shape or form providing this index price does not head south too fast, contract weaner values should maintain recent levels for the time being.

Feed ingredient values have ended another relatively quiet week with futures prices for UK feed wheat quoted at £157/t for June and £163/t for September.

Barley traded at £131/t for June and £129/t for September and as far as proteins are concerned, prices have held relatively stable with Hipro soya changing hands at £309/t for June and £206/t for November – April 2021.

There is however a fair bit of chest beating going on by the American Chump in connection with his trade war with China as well as the massive cull that is taking in parts of the US following COVID-19 related abattoir closures and it will be interesting to see what effect this might have on soya values and pig meat prices on the other side of the pond.

And finally, spare a thought for US pig producers who are reported to be facing losses in the region of $700 million with the prospect of as many as 7 million pigs being euthanised due to the lack of meat processing facilities, which are compliant with COVID-19 working distance rules.

This could, however, lead to shortages of pig meat on the shelves in the third/fourth quarter of the year and could possibly benefit the US and global retail prices to some extent.

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