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Pig Meat Market on the Road to Recovery

04 March 2013

UK - For the first time since early October, shout prices have started to nudge ahead and although Tulip elected to stand-on, on Thursday night, followed by Gills — Cranswick were the first to break ranks and moved their price up by a penny with Vion and Woodhead following suit, writes Peter Crichton in his latest Traffic Lights commentary.

The slightly revised shout price league table now reads as follows:

157p Woodhead up 1p
153p Tulip
153p Gills
152p Karro up 1p
152p Cranswick up 1p

The spot market also reflected tighter supplies with bacon buyers lifting their bids by up to 4p/kg, but on Friday afternoon some were still looking for pigs to cover the back end of next week with spot bacon generally traded in the 154p–156p/kg region and lighter weights also commanding modest premiums of 4p–6p/kg above this. The DAPP also improved a shade and now stands at 156.07p.

There is no doubt that the recent Tesco pledge to source more British pork should help on the demand front coupled with the launch of their sustainable pig supply group with slaughtering due to start next week. Producers will be paid a base price in the region of 170p/kg with an escalator linked to the price of wheat and soya as well as bonus payments for free-farrowing and straw-based finishing systems worth another 5p/kg.

This will all help to put more money on the table and other abattoirs and processors may well have to adjust their bids to compete.

The euro has ended another eventful week trading on Friday worth 86.51p which is a tad dearer that its value seven days ago.

Although European mainland pig meat prices are reported to have levelled out, cull sow demand continues to improve with export abattoirs prepared in most cases to put an extra penny or so into the pot with the result that culls were generally trading in the 108p–110p/kg range according to spec.

Weaner prices continue to improve with the latest AHDB 30kg ex-farm average quoted at £46.56/head, but buyers are still cautious due to high feed costs. Although the cereal markets have had a relatively quiet week with March wheat futures quoted at £202.65/t and July at £207.35/t, significant movements in the value of the pound against dollar have put up soya prices. This is yet another reason why finished pig prices need to continue to recover to have chance of putting producers back in the black.

Trafficlights Peter Crichton

ThePigSite News Desk

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