Mixed messages from the market place with some signs that there could be a small light at the end of the tunnel (or possibly an oncoming train), but on the whole the indications are that demand is no worse than it was last week and most of the major UK players have left their weekly contribution prices at stand on levels between 130p and 142p.
The SPP took another downward plunge falling by 4.66p to 146.35p compared with 157.6p a year ago, but that was when UK ex farm feed wheat cost £177/t rather than almost £200/t today.
UK pig prices remain under tremendous pressure from much cheaper imports, although the influential German producer price has held at last week’s bargain basement level of 1.20 EUR putting a tin lid on the chances of any significant price recovery this side of Christmas for hard pressed pig producers.
One-off loads of spot baconers remain very hard to sell and are generally in the 110p – 120p/kg region with slightly more for gilts in the lighter weight ranges, but regular sellers should be getting around 130p/kg or more in places.
Currency values are exactly the same as a week ago, with the Euro traded on Friday at 84.39p. As a result of little change in currency and EU pig meat values, sow quotes have at least stopped falling for the time being with quotes in and around 23p – 26p/kg and a miserable return for even more miserable pig farmers in the current climate.
The slump in the SPP has fed through to the weaner market where the latest AHDB 7kg weaner average has dropped to £34.78/head ex farm and looks as though it will continue to head south following the track of the SPP, against which many contract prices are calculated.
There are, however, a disturbing number of cases being reported of weaners being almost given away and, in some cases, actually changing hands at nil value, further underling the financial challenges being faced by all sectors of the industry and rising numbers of young pigs are being euthanised rather than reared, due to a lethal combinate of a lack of space and even higher feed prices.
This situation is backed up by a glance at the latest raw material prices which saw November delivery feed wheat continue to rise quoted at £210/t and £190/t for September 2022.
The UK spot feed wheat ex farm average price has also risen and now stands at £199.10/t. Feed barley futures prices are almost outperforming wheat with the latest data indicating very short supplies, although some sellers are sitting on their stocks hoping prices might go still higher, but some recent deals have been agreed at £201/t for November and £178/t for September 2022.
Protein values are in the main continuing to head north with Hipro soya meal for November delivery traded at £370/t, up £9/t on the previous week, and longer deals for May – October 2022 noted at £329/t. Rape meal also traded dearer by £10/t for November – January 2022 delivery at £278/t.
And finally, although a few signs are emerging that pig prices could be bumping along the bottom of a very deep trough, which hopefully has not got a hole in it, this still paints a fairly bleak picture of the pig landscape.
Although the overweight pig slaughter prices are being included in the SPP with the effect of hitting this index price hard much to the dismay of many producers, it has however helped to narrow the yawning chasm between UK and global pig prices.
Average UK slaughter numbers are around 3% lower than a year ago, but carcase weights are up at 91.45p/kg.
The lack of migrant labour is still a major problem throughout the pig slaughtering sector, although the beef and lamb sector seem to have less of a problem with this, but rising Covid infection levels could also hit farm and abattoir workers.
With numbers soon being pulled forward for Christmas it seems that a further bottleneck could also occur at the end of the year unless a combination of improved demand and more labour availability in the butchering sector occurs, it may be some while before any green shoots of recovery start to grow.
Some industry sources are already waking up to the fact the pig numbers will be tight in the year ahead for those producers who can hold their breath that long… we live in hope.