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AHDB Pig Market Weekly


11 July 2012

AHDB UK Market Survey - 6 July 2012AHDB UK Market Survey - 6 July 2012

The seasonal rise in finished pig prices continued in week ended 30 June, with the EU-spec DAPP breaking through the 150 pence barrier, adding a further 0.32p to reach 150.31p per kg.

AHDB

Auction Market Update

The total number of cattle sold through GB livestock markets in the first six months of the year was down eight per cent on the year at 153,000 head. This is in line with the decline in prime cattle slaughtering over the same period. Steer and heifer throughputs both fell by eight per cent while young bull throughputs were nine per cent lower. These tightened supplies have done much to keep prices buoyant. Overall the average liveweight prime cattle price in the first six months of the year was 187.6p per kg, an increase of almost 30 pence year on year. This was driven by similar increases for all classes of prime cattle.

Supplies of cull cows at GB auction markets have also been considerably tighter than in 2011. At 95,000 head cow numbers in first half of the year were eight per cent lower than 2011 levels. This reflects the decline in national slaughterings, which in the year to May were down six per cent on the year. The number of dairy cows marketed at auction were only three per cent lower while beef bred animals were down nine per cent. As with prime cattle these tight supplies have created upwards pressure on prices and at 128.1p per kg the all cow average price in the first six months of the year was almost 18 pence higher on the year.

Throughputs of lambs in the first six months of the year were only two per cent lower year on year at 2.76 million head. However, there is some disparity between the number of old season and new season lambs. Throughputs of old season lambs were marginally higher year on year at 2.15 million head while in contrast throughputs of new season lambs were back 11 per cent. While the new season seemed to start earlier severe disruptions in recent weeks has contributed to the tighter supply.

As with throughputs there is considerable differences between old and new season lamb prices. In the first three months of the year prices remained buoyant and tracked above 2011 levels. This has resulted in the prices for old season lambs being comparable with 2011. Overall the OSL SQQ price was two pence higher than in 2011, at 201.8p per kg. With prices falling in the post Easter period new season values have consistently tracked below the exceptional levels recorded in 2011. At 203.2p per kg the average NSL SQQ price was 24 pence lower year on year.

Pig Market Trends



Prices

The seasonal rise in finished pig prices continued in week ended 30 June, with the EU-spec DAPP breaking through the 150 pence barrier, adding a further 0.32p to reach 150.31p per kg. There has been some tightening of supplies in recent weeks, with estimated GB clean pig slaughterings below the level for the equivalent week last year for the first time in nearly three months at 156,300 head. The average carcase weight fell by another 200 grams to 77.75kg. This is only slightly heavier than a year earlier, when weights were rising, suggesting that rising feed costs are starting to encourage earlier marketing of pigs.

Having fallen by more than three pounds in the last two months, the average 30kg weaner price was little changed at £42.32 per head in week ending 7 July. This is despite further increases in feed prices, with nearby futures wheat closing in over £200 per tonne at the end of the week.

Consumption

Household expenditure on fresh and frozen pork increased by five per cent in the 12 weeks to 10 June 2012, with £217 million spent on pork. Nevertheless, the quantity of pork purchased declined by three per cent. The decline has been driven by reduced purchases of leg and shoulder roasting joints, recording falls of 18 per cent and 14 per cent respectively. Changes in promotional activity had a heavy influence on these trends. In the latest 12 weeks, 13 per cent of pork shoulder was sold on promotion, considerably lower than last year’s figure of 28 per cent. There was also lower promotional activity on pork leg joints. The strongest increase in purchases came from pork loin roasting joints, with a 46 per cent year-on-year increase.

In the latest 12-week period, the amount of bacon purchased was two per cent higher than a year earlier while expenditure was up by four per cent. Rashers were the main driver behind the increase in volume purchases, although chops recorded the strongest year-on-year increase, up by 74 per cent albeit from a smaller base.

Pork sausages recorded a four per cent year-on-year increase in purchases in the latest 4-week period. Purchases of sliced cooked meats were also higher than a year earlier, rising by three per cent. Other popular picnic items such as sausage rolls (up seven per cent) and pork pies (up five per cent) also recorded strong increases in volume purchases, benefiting from the Jubilee holiday period at the start of June. Nevertheless, disappointing weather conditions have meant that, over the full 12-week period, purchases of all these processed products were lower than a year earlier.

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