A rollercoaster of a week as the SPP continues its recovery, putting on a further 1.35p to stand at 143.86p and although this is a step in the right direction, there is still a long way to go before producers are out of the red and into the black.
Weekly contribution prices are also continuing to improve, rising by between 2p and 4p/kg, with most within the 140p – 144p range, helped to a significant extent by reports of some monthly contribution prices increasing by up to 15p for May. This works out at a weekly average increase of 3.75p/kg.
However, on the other side of the Channel, Covid continues to severely limit export opportunities for German pig meat where over 1,000 wild boar outbreaks have now been identified with ASF, which thankfully has yet to get into their domestic herd and, hopefully, it will stay that way.
The German pig price has fallen by 8 Cents to 1.42 EUR, which works out at a 5.3% drop, undercutting UK prices to a significant degree.
UK spot bacon pigs remain in short supply and buyers will have to think in terms of beating contract bacon prices, with some reports of spot bacon prices up to the 150p/kg mark.
Unfortunately the resurgence in the number of meat processors in the EU who are unable to comply with Covid restrictions has led to a significant delay throughout the whole cull sow supply chain and, as a result, cull prices paid by UK export abattoirs have dropped by around 7p/kg. This means in the past seven days, cull values have lost to the tune of around £20 per head, with most now worth between 52p – 57p/kg and, until normal service is resumed, this could continue to haunt UK cull prices in the weeks ahead.
At least the Euro has remained relatively stable trading on Friday almost unchanged on the week at 86.7p.
With the contract price of many weaners tied to the SPP, which is now on the rise, weaner prices will to some extent follow suit, but on the other side of the coin recent rises in feed costs are nibbling away at finishers margins and despite a better outlook for slaughter pig prices in the weeks ahead, weaner buyers are still remaining fairly cautious.
Unfortunately, no AHDB weaner prices have been quoted for several weeks, but reports are indicating that 7kg RSPCA assured piglets are generally trading in the £35 – £37/head range with Red Tractor at a discount of £2- £4/head, in some cases.
The lack of any significant rain in the UK over the past four weeks is putting crop yields under pressure and if the same pattern is repeated in northern Europe, this could have an impact on feed costs, which are continuing to rise, with futures prices firmer with May wheat quoted at £207/t and October up from £174/t to £184/t.
Feed barley is also significantly dearer with May delivery deals done at £175/t compared with £165/t a week ago. Spot UK ex farm feed wheat prices are continuing to display bullish tendencies with the latest weekly average up from £191/t to £195.50/t.
Protein values are also continuing to travel north with Hipro soya traded for May – October at £373/t, which is £9/t above their levels a week ago and longer months are also looking relatively expensive with November – April 2022 at £378/t.
And finally, disappointment but no real surprise with reports that the Government is allowing public bodies to procure food imports which have been produced to welfare standards lower than permitted in the UK on the grounds of cost.
Yet another example of financial damage caused to the pig industry following Brexit and adding to the problems already being suffered as far as UK cull sow values are concerned.