Pig Producers on Receiving End of Better Prices
05 December 2011UK - As we all know Christmas can be a time for giving as well as taking, but on this occasion it looks as though British pig producers will be on the receiving end of better prices rather than a kicking from Mr Scrooge, writes Peter Crichton in his Traffic Lights's commentary for 2 December.
Although the DAPP eased a shade, dropping by 0.07p to stand at 147.41p and Tulip's decision to stand-on with its shout price was unsurprisingly followed by all of the other big players, spot quotes were showing an upward trend.
As a result shrewd sellers with spot bacon available were able to negotiate prices in the 150p region with the odd penny or two more available on a tighter spec and no shortage of takers.
Better demand has been boosted by plenty of "pile it high and sell it cheap" pigmeat promotions in some of the larger supermarkets and smaller wholesalers were also reporting better demand with premiums of 4p–8p above bacon for lighter weights.
The shout price placing remains unaltered as follows:
Still equal 1st: Gills and Woodhead 148p
Next Tulip 146p
Still last Cranswick and Vion 145p
Providing retail demand remains at firm levels it looks as though prices should hold right through until the New Year, which makes a pleasant change from some of the bleak Christmas pig trading periods suffered in the past, unless anything nasty happens to the euro.
With a lot of negative forecasts over the future of the eurozone it would be a disaster if the euro lost value and whilst it has remained under pressure it still closed on Friday at 85.8p, which is almost exactly what it was worth a week ago.
Not only does the value (or otherwise) of the euro have a major influence on finished pig prices, but it also greatly affects cull sow quotes with the vast majority of British cull sows heading for Europe.
More competition in this sector has however helped to maintain very firm prices with quotes in the 118p–122p according to region and specification with particularly strong competition in the south east where the three main export buyers were all looking for extra volumes through their plants.
Better news in the weaner market as well and although the AHDB 30kg ex-farm weaner average has only nudged its way up to £42.97/head, private trades are reported to be £3-£5 ahead of this with additional premiums available for Freedom Food weaners.
Although feed wheat prices appear to have levelled out with the LIFFE January to March positions virtually unchanged at £144.00/tonne and ex-farm wheat steady at £138.70/tonne, this certainly paints a much rosier picture than a year ago when feed wheat was nudging up towards £200/tonne and many pig farmers were having their financial anatomy severely squeezed.
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