Something of a two-tier trade has emerged with reports of soaring pig prices in mainland Europe where the influential German producer price has risen by 30 cents over the past four weeks to €170, which is equivalent to a 25p/kg rise in our money.
This is due to two main factors which include the reduction in the numbers of slaughter pigs available in mainland Europe following the rise in herd culling; but the main factor is the scourge of African Swine Fever in China, which has now spread to Cambodia.
As a result, global pig prices are shooting up, although much of this has yet to filter through to the UK market where the SPP mysteriously fell by 0.23p to 137.73p and despite the rising global value of pigmeat GB contribution prices have only moved up by a copper or two.
However, signs of improving prices across the board are starting to emerge in the spot market where deals at around the 140p/kg mark represented a rise of between 2p – 4p on the previous week and it looks as though for the first time in a long while spot prices will be higher than the SPP, which may tempt some sellers to move some pigs away from contracts.
Cull sow prices always provide a ready barometer of the health (or otherwise) of the European mainland pig market and as a result UK cull sow values shot up by another 8p/kg with most now between 85p and nudging up towards the 90p/kg level in places.
On the currency markets the value of the euro remains virtually unchanged trading on Friday worth 85.85p compared with 85.78p a week ago.
European weaner prices are reported to be rising sharply, but this has yet to rub off on domestic values where the latest AHDB 7kg ex farm weaner average of £35.23/head was down by 0.22p and the 30kg average was once again not published due to insufficient data, but RSPCA Assured 30kg pigs are now trading in the £47 – £50/head region.
Feed prices are also continuing to give pig producers a little relief with Hypro soya meal traded between May-October 2019 at £287/t and for November 2019-April 2020 at £294/t.
Rape meal values have remained at stand on levels with May-July 2019 traded at £191/t.
London feed wheat traded for May 2019 delivery at £163.50/t and for November 2019 at £146.75/t and e Ex farm feed wheat is holding at a weekly average value of £162.10/t.
And finally, although Brexit has been dominating the political headlines, the AFS situation in China is having a much greater current financial effect as far as the pig industry is concerned with over 100 case detected in China since August 2018, but recent reports are emerging indicating that the true scale of the outbreak may have been understated.
The Chinese pig herd is around 19% down over the last 12 month period, which will knock a big hole in production levels and re-stocking ASF units could turn out to be a much longer process in a country the size and scale of China.
Reports are also indicating the ASF has been identified in Mongolia, which means that Thailand and Taiwan could also be vulnerable.
However, on the basis that “every cloud has a silver lining”, at least global pig prices have been given a significant lift for the foreseeable future.