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Comment

The Sun Has Got His Hat On

Peter CrichtonBy Peter CrichtonMay 29, 20203 Mins Read
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Pig prices have remained firm throughout the week and, although the SPP has only moved up by 0.17p to 164.51p, spot demand keeps pushing ahead reflecting a shortage of pigs in the UK supply chain with spot deals agreed for next week at between 4-8p/kg higher than the SPP.

Prices have also remained relatively firm across the water with the influential of German producer price quoted at 1.66 EUR, which translates to 150p in our money.

Weekly contribution prices have remained becalmed and have now been at their current levels for around 6 months within a fairly wide 155p – 163p range.

A rising Euro has also helped to put up the cost of pig meat imports and makes our exports more valuable too, with the Euro trading on Friday at 90.29p compared with 89.53p seven days earlier.

Unfortunately, however, this improvement in the value of the Euro has yet to filter through to the cull sow market which remains at rock bottom levels for now, between 65p – 70p/kg in the main.

Weaner prices are also reflecting a slight shortage of pigs in the system, with the latest AHDB 7kg ex farm weaner average up by £1.05 to £42.86/head and 30kg prices even firmer, up by £2.05 to average £59.92/head.

Providing finished pig values remain at current levels, the signs are that weaner prices will also follow and some cases of infertility earlier on in the year have also kept supplies on the tight side.

However, as far as feed prices are concerned, the recent spell of hot weather with little rain in the UK forecast for the next two weeks and dry weather in Russia also reducing wheat yield forecasts, means futures prices have been nudging higher with UK feed wheat quoted for June at £167/t and September at £175/t. Spot UK wheat is trading at £156.90/t ex farm.

Feed barley prices are also moving ahead with June quoted at £136/t and September at £142/t.

Protein values have remained at stand on levels in the main with Hipro soya quoted at £303/t for June and £306/t for November – April 2021.

And finally, although some abattoirs and meat processors have struggled to meet COVID-19 working distance rules the industry as a whole has done well to keep all the wheels turning and with very few reports of major closures disrupting the pig meat supply chain to a significant extent.

The slow resurrection of the catering trade and alfresco BBQ patio dining on the increase may also help to improve pig meat demand, but if feed prices continue to move ahead producers may well need every penny (or Euro) they can get.

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Peter Crichton

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