Peter Crichton’s Pig Commentary
PUBLISHED: 16:00 16 February 2014
Demand has remained somewhat calmer than the weather with most pigs traded at or around stand on levels, although contract prices have drifted downwards in sympathy with the DAPP, which dropped by 0.6p and now stands at 165.2p.
The spot market is not a place for the fainthearted with a fairly wide range of prices on offer and most spot bacon sold at or around 157p/kg, but non-Farm Assured pigs were trading at a 10p – 15p/kg discount and regular spot supplies of Farm Assured pigs were in some cases breaching the 160p/kg barrier.
Although February is often a difficult month for sellers, it is mercifully the shortest one on the calendar and with reports of relatively tight supplies of UK pigs, there are signs that demand could improve in the next 4 – 6 weeks reflecting this.
EU mainland pigmeat prices are still presenting a significant challenge with reports of Belgium carcasses available on a delivered basis to the UK ex head and feet at 145p/kg, which represents a discount of up to 30p/kg compared with the UK product.
The pigmeat import / export balance has not been helped by a stronger pound which saw the Euro falling in value by 1.3% trading on Friday worth 81.96p.
Despite currency fluctuations, cull sow sellers were relieved to note that the recent decline in prices seems to have levelled out with abattoirs quoting at positive stand on levels of around 98p/kg and the odd copper extra available in places, according to spec.
Spot weaner buyers are also starting to wake up to the fact that there are very few spare pigs out there and with feed costs at current levels profit margins are available, providing finished pig prices stay at current or improved levels in the weeks ahead.
As a result, the latest AHDB 30kg ex farm weaner average stands at £56.38/head with 7kg piglets traded at £41.32/head, but in both cases good quality Freedom Food weaners and piglets are worth a significant premium.
Feed prices are continuing to reflect generally static trends with ex farm feed wheat quoted at £149.80/t on a spot basis and futures quotes on the LIFFE market for March wheat holding at £151.25/t and longer months saw July traded at £155.75/t, but November significantly lower at £147/t.
In the proteins sector Soya is trading at just under £400/t and rape meal at £248/t, which are also showing a slightly easier trend than previously.
And finally, producers have been refreshed to see that the DAPP is continuing in its present form, despite Cranswick and Karro no longer contributing their figures. We still have a reliable index price as a benchmark for the industry as a whole, not forgetting that the UK like all other EU countries are required to submit a weekly reference price to Brussels, which is another reason why it makes sense for the DAPP to be retained rather than being replaced by anything else.