The Sound of Silence

Unfortunately, as expected the SPP took a big hit this week dropping by 2.06p and now stands at 154.31p, although it is slightly more reassuring to hear that the German producer price has remained at stand on at €1.25 for the fourth week running, which at least is better than continuing in freefall.

For comparison purposes, the German producer price in June was €1.57 EUR. UK weekly contribution prices are continuing to slip, albeit in small steps with a penny or so being clipped off some prices, which are now anywhere between 146p at the top end and not much more than 130p at the bottom, although one of the major players actually stood on, thank you!

Regular spot bacon sellers could also be looking at prices in the 130p/kg region but, once again, there is precious little room for surplus pigs.

Cull sow prices are also facing a big knock and have been pulled back by a further 6p – 7p/kg in places which translates to between 30p – 34p/kg making the average cull sow worth less than £50/head. Apparently, this big price crash is due to a combination of Covid problems with EU processing staff as well as a surge in the number of cull sows awaiting slaughter in an already oversupplied market.

One minor consolation is that the value of the Euro has improved to some extent trading at 85.62p today compared with 85.36p a week ago.

Once again, no weaner prices are available from AHDB and although 7kg piglets sold on contract have been traded in the £36/head region for RSPCA assured stock, Red Tractor pigs remain at a discount and spot weaners are hard to place anywhere.

There have, however, been some indications that weaned piglet numbers are dropping in some places, which might indicate a reduction in finished pig availability and better prices early next year.

Unfortunately, British pig farmers are not getting any respite as far as feed costs are concerned with the latest spot ex farm feed wheat average quoted at £180.40/t which is £3/t up on last week and futures prices are also travelling north with October feed wheat traded at £194/t and September 2022 at £178/t.

Feed barley is also continuing to rise in value with October quoted at £181/t and September 2022 at £166/t.
Proteins remain at similar levels on the week with October Hipro soya at £379/t and May – October 2022 at £340/t. Rapemeal is trading at £255/t for October and £250/t for November – April 2022.

And finally, although pig prices are painting a gloomy picture those producers who have the financial resources to face the current crisis could see better prices in the year ahead.

Until then, however, a whole host of challenges remain including culling herds with no signs of any Government support or assistance and an extension of the ‘no check’ pig meat import flow despite earlier promises that there would be a phased introduction following our departure from the EU.

There is also a shattering silence and no real Government interest in improving the chronic labour shortage throughout the HGV and pig processing industry requesting the implementation of a Covid recovery plan for 12 month temporary labour visas to help businesses recruit labour as a short term stopgap to the labour famine.

In the meantime, some very slender green shoots with the proposal by the AHDB to suspend the 85p per pig slaughter levy for 4 weeks which will put a few coppers back in the hole in producer’s bank balances.

And finally, finally, news that some of the larger abattoirs are arranging for overweight pigs to be slaughtered on a flat rate basis to be frozen and boxed for export at price levels, which can compete with low global pig meat values in China. But as a result overweight prices are in some cases not much more than 70p/kg, although this could be the only option producers can take on the basis that half a loaf is better than no bread.

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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