In spite of all the additional challenges which the pig industry has to face following the Russian invasion of Ukraine, the green shoots of recovery referred to in last week’s report are still continuing to nudge their way through frozen ground encouraged by the news that German pig prices are continuing to rise, with their producer price up by 7 cents (almost 6p/kg) and sow values moving ahead by around 4p/kg.
GB weekly contribution prices have remained at stand on levels between 130p-138p but a round of applause to the first processor to actually increase their weekly price.
With imported pig meat also rising in value the chances are that spot bacon pigs may be a little easier to find than previously, but there is still a long way to go before they catch up with the SPP, which drifted lower by 1.28p and now stands at 137.49p. The number of overweight pigs still on farms is also reported to be shrinking, but at a slow rate.
The improvement in cull sow prices to the tune of around 4p/kg has also put a little bit more bread on the table with most culls worth between 27p – 30p/kg although this is still a country mile below what they should be making, but in the words of a certain supermarket, every little bit helps.
Despite all the disruption to global currency markets caused by the Russian invasion, the Euro has only moved up a tad from 83.42p to 83.60p.
Trade sources are indicating that the main reason why the German pig and cull sow price rises have occurred is because slaughtering throughputs have now largely recovered with Covid less of a problem than it has been, at a time when unsurprisingly pig numbers are also beginning to dwindle reflecting the large number of sows which have been culled throughout much of Europe over the last twelve months or so.
Weaner prices are unfortunately still on a downward track reflecting huge concerns over soaring feed prices with the latest AHDB 7kg ex farm average quoted at £33.95/head, but although spot weaners remain hard to clear one or two buyers with strong nerves are starting to ask questions about future availability, which could be a sign of a slightly better market in the months ahead.
Following on from the Russian invasion, feed costs have hit the headlines with feed wheat futures prices quoted at an eye watering £247/t for March delivery and £218/t for September.
The UK weekly average ex farm spot feed wheat price has also shot up and currently stands at £225/t.
Feed barley deals have also followed this upward trend with March quoted at £227/t and September at £203/t.
Protein prices are also reflecting a very bullish market with Hipro soya for March quoted at £466/t and for November – April 2023 at £444/t. Rapemeal deals for March – April have been made at £350/t and for August 290/t.
And finally, whilst it is still difficult to find many positive factors to help the recovery of the UK pig industry, signs are emerging of better prices in Europe after a long period in the doldrums and the more that can be done to close the gap between UK and EU pig meat prices the better for us.
However, producer prices will need to be well above 200p/kg if feed costs remain at their current levels before the pig meat supply chain is back on the rails.
And finally finally, an appropriate quote to reflect the nightmare situation in Ukraine could be ‘a lie told often enough becomes the truth’ (Vladimir Lenin).