Tired of Waiting

Pig values appear to be pausing for breath at a time when pig producers need prices to re-accelerate to try and reduce the gaping chasm between COP levels and the price of pigs.

The latest SPP is however moving in the right direction and rose by 4.01p to 161.74p. UK weekly contribution prices are generally tending to remain at similar levels with a glass ceiling at 190p and others between 168p – 170p, but spot prices are definitely on the move with regular sellers able to achieve prices between 130p and 140p/kg in the main and more for lighter weights in the fresh meat sector.

Although the Euro has risen a touch and stands at 83.9p, this was not enough to tempt cull sow buyers to dig a bit deeper and put prices up most of which stood on between 74p – 78p/kg, but with a significant number of pig producers being forced to cull a growing number of sows are heading for the exit door due to the massive losses still being clocked up on farms by many pig producers.

On the plus side, those weaner producers with contracts linked to the SPP are getting a generally better return for their pigs, although in the absence of any AHDB weaner price statistics, it is difficult to report recent values but prices for RSPCA assured piglets have generally been in the £34-£38/head range with the prospect of more to come if the upcoming pig shortage materialises.

However, with ongoing concerns over feed costs and the straw season not too far away, pig finishers are still being extremely cautious with their buying decisions and who can blame them.

The warfare in Ukraine continues to put an immense amount of upward pressure on cereal and protein prices, although in the last few days some of these have to some extent levelled with feed wheat for May delivery easing slightly from £327/t a week ago to £320/t now and September wheat is also a shade easier at £285/t.

UK spot feed wheat traded on an ex farm basis at £308.1/t which is very little changed from last week, but still way over the top as far as pig producers are concerned. Feed barley futures prices are not far behind wheat with May delivery quoted at £314/t and September at £273/t.

With the continuing Russian advance into Ukraine disrupting all protein and cereal markets, it is no surprise that Hipro soya meal values continue to rise with May deliveries quoted at £492/t and for November – April 2023 at £483/t.

On a slightly more positive side UK rapemeal for May – July delivery has remained relatively static at £403/t.
Unfortunately, the cereal and protein markets continue to be spooked by Ukraine’s situation and in the unlikely event of some form of truce being agreed, the months ahead remain vulnerable to further rises in production costs for pig producers.

And finally, although signs are emerging that some of the backlog of heavy pigs is being eroded average carcass weights are still high at 93.14kg and slaughter numbers have dropped by 9% over the past week’s kill, but that was during a ‘short’ week.

Looking ahead, industry sources are flagging up that unless retailers and abattoirs are prepared to find ways of passing on a sustainable return to pig producers it will be difficult for the whole UK pig supply chain to weather this particularly nasty storm which looks set to go on for quite a while.

One way in which some stability might be brought back to the pig industry is if producer contracts include a realistic COP element to allow pig incomes to keep pace with costs, rising inflation and falling consumer demand, but many producers have already reached the end of their chain and can wait no longer as far as any rescue package is concerned.

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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