Spot Surges Ahead, Shouts Stand-on11 March 2013
UK - The much criticised shout price system came under the spotlight once again today when, despite spot prices moving ahead by a further 4p, with the noble exception of Gills, the big operators decided to peg their prices at similar levels, putting the blame on large stocks still in cold stores, rather than having too many live pigs in the system, writes Peter Crichton.
Although Tulip is normally first off the mark, it deferred announcing its price until midday on Friday by which time Cranswick had come out at stand-on levels and the league table now reads as follows:
The evidence on the spot market was, however, that contract prices should have risen which was sadly not the case and the DAPP announced during the week also slipped a shade to 155.46p.
To rub salt into the wound lamb prices have risen sharply and beef is flying. Although shout prices have fallen by 6p/kg since early January, it is not believed that wholesale pigmeat prices have also dropped to that extent over the same period. This comes at a time when producers' margins would appear to be under much more pressure than processors' profits.
The promise of jam tomorrow will not go much further to help those producers whose overdrafts have reached the limit and more cull sows are expected to head for the exit gate in the weeks ahead, unless there is a rapid reversal in pig prices across the board. The message to processors, wholesalers and retailers is to use it, or lose it.
A steadily improving cull sow market also continues to underline the fact that continental pigmeat prices are not in decline, also helped by a slightly stronger euro which traded on Friday afternoon worth 87.1p compared with 86.56p a week before.
The three main cull sow export abattoirs were bidding within a fairly tight 109p–112p price range according to load size and spec.
Although feed prices seem to have plateaued they are still far too high in relation to feed costs with HiPro soya trading close to £400/t and LIFFE wheat futures quotes from March through to July at or around £200/t.
Weaner prices are continuing to make steady upward progress with the latest AHDB 30kg ex-farm weaner average now quoted at £46.89/head, but significant premiums of £2-£4/head are available for Freedom Food weaners on a spot basis.
With the upcoming Easter Bank Holiday now only three trading weeks away producers are hoping that the long awaited pig price recovery will start before then, but the gap between spot and contract prices continues to widen which underlines the weakness of the current contract pricing system.
Free Champagne by the Bucket
And finally... a rare annual opportunity to get a free drink from me and drown your sorrows at the Ampton Point-to-Point near Bury St Edmunds this Sunday where I am sponsoring the Confined Hunt Race.
If you are able to attend I will be only too pleased to see you in the Sponsors' Tent, but please do not ask me for any tips as I cannot promise these will be any more accurate than my pig price forecasts.
ThePigSite News Desk