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No New Year Hangover

31 December 2012

UK - Although pig trading today closed the year on a relatively quiet note, producers will be relieved to know that virtually every available pig has been sold and we have managed to avoid the normal attack of pig indigestion that hits the supply chain over the Christmas and New Year period, writes Peter Crichton.

As expected Tulip held its shout price for the eleventh week running and all of the other major players followed suit, so the end of 2012 scoreboard remains as follows:

163p Woodhead.
160p Gill.
159p Tulip and Vion.
58p Cranswick.

Spot buyers were quiet for the second week running and are unlikely to feature much in the market until the holiday period is over when demand returns to normal, although for the small number of bacon pigs that were traded, prices in the 153p–156p range seemed to be the norm.

It was pleasing to see that the DAPP has managed to cling onto its earlier gains and closed the year at 161.09p compared with 147.63p exactly a year ago.

Fortunately the euro has also ended the year on a reasonably firm note trading on Friday at 81.85p, but this is still slightly behind its value of 83.5p a year ago.

Unfortunately cull sow prices remain under pressure and until European processors are back to normal working, a relatively limited number of British sows were traded at stand-on levels and £1/kg ruled the day.

Weaner prices are continuing to move ahead with more buyers than sellers in the market which is in stark contrast to the situation a few months ago. Although the latest AHDB 30kg ex-farm weaner quote has not yet been published, this is likely to show further increases on last week’s £46.19/head value.

Weaner buyers are also looking further ahead with much more interest in 7kg lots which are now worth in the region of £35/head on a spot basis.

The Vion takeover and the Tesco direct marketing initiative remain the main talking points with sellers hoping that this will translate into better prices in 2013 coupled with the upcoming European Union stalls ban, which may not however have much of an impact on European pig availability until mid to late summer. Further pressure is expected from the NPA to ensure that British retailers do not stain their reputations and get caught selling “illegal” pigmeat.

News from market leaders Woodhead that it is also looking to secure further supplies of contract pigs for its Spalding abattoir should also help to turn the whole finished pig sector into much more of a sellers’ market than it has been recently.

However a glance a grain prices reminds everyone of just how fragile the state of the pig industry remains at present and a further 10p–15p/kg deadweight is urgently required to ensure more producers have not headed for the exit door by the end of next year.

Unfortunately grain futures prices still remain bullish with May 2013 traded at £212.75/t up by £4/t on yesterday’s close.

Another tough year ahead, but hopefully those left in the industry are in horseracing terms “stayers rather than fallers” and will be able to remain on their feet for a little longer.

Trafficlights Peter Crichton

ThePigSite News Desk

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