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Spot Outperforms Shouts Again

13 May 2013

UK - A much more positive day for sellers with Tulip setting the trend by lifting its shout price 2p to 163p, writes Peter Crichton.

This move was followed by all the other major shout price abattoirs, and the DAPP is also moving in the right direction rising by 1.1p to stand at 162.46p, which is as high as many of us can remember.

Woodhead 166p
Gills 164p
Tulip 163p
Cranswick 162p
Karro 162p

However once again spot buyers out performed their contract price counterparts and although reports were heard of 170p/kg being offered by few outlets on a relatively tight spec, as a general rule most spot bacon was traded in the 166p–168p/kg range.

Lighter pigs are also continuing to earn a useful premium but the effects of high feed prices are still hitting producers' margins and many are still operating at a loss.

Reports of two further herds being culled are a further indication of the price pressures that producers have been facing in recent years and unless the current price recovery continues, more may head in the same direction.

Another problem facing the market is the torrid state of continental pigmeat industry where prices are still at exceptionally low levels and some 30p/kg below British levels with the result that imports are becoming an even more attractive option on the wholesale market.

The weakness of European Union mainland prices has been further underlined by cull sow quotes which are trading at 20p/kg below their level a year ago with most export abattoirs bidding at around £1/kg also reflecting a relatively static euro trading on Friday worth 84.45p.

Weaner prices remain firm although buyers are still cautious because of high feed costs with the latest AHDB 30kg ex-farm weaner average quoted at £49.56/head and 7kg pigs mainly trading in the £35/head region, which barely matches cost of production levels.

Grain prices have been reflecting a very slightly easier trend with ex farm wheat traded at £188.50/t and forward wheat quotes on the LIFFE market of £191/t for this month and £182.25/t for next November.

On the whole however there are a few more reasons to be cheerful than there were a month ago, but still a long way to travel before producers can actually afford to smile.

Trafficlights Peter Crichton

ThePigSite News Desk

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