Shortage of Higher-welfare Pigs20 May 2013
UK - Although the DAPP continues to break new ground rising by 0.33p to stand at 162.79p, flagging up further significant shortages in the British pigmeat supply chain, prices stood at stand-on on Friday (17 May), writes Peter Crichton.
Although the DAPP continues to break new ground rising by 0.33p to stand at 162.79p, flagging up further significant shortages in the British pigmeat supply chain, prices stood at stand-on at the end of last week.
Spot pigs continue to be in short supply and although most buyers tried to hold their ground at similar levels to last week, it was possible to squeeze the odd penny or two extra in places with the result that spot bacon was generally traded in the 166p–168p/kg range with a few cases of a copper or so more where buyers were particularly short or on a tighter spec.
On the downside, however, good quality Belgium carcasses are hitting these shores ex-head and feet at around 165p/kg, which means that the British counterpart is now around 25p/kg dearer than this, which will no doubt encourage some of the buyers operating at the commodity end of the trade to save money by switching to foreign gear.
A significant shortage of Freedom Food pigs following difficult winter conditions earlier in the year and rising demand from some of the top-end retailers means that this sector has become something of a sellers’ market and it should not be too long before premiums of at least 10p/kg above DAPP will be available, but bearing in mind the extra costs including straw involved in high welfare production, significant premiums are needed to make this viable.
The euro has had another relatively lacklustre week closing on Friday almost unchanged at 84.48p, but the cull sow market still remains in the doldrums reflecting indifferent continental manufacturing pigmeat prices. As a result most cull sow buyers were operating in a narrow 100p–102p/kg band according to load size and specification.
Weaner prices are continuing to nudge ahead with the latest AHDB 30kg ex-farm weaner average now quoted at £49.63/head, but any wearing Freedom Food badges are worth £2-£4/head more than this.
There seem to be fewer bulls and more bears in the commodity markets recently where prices have eased back a shade due to better global crop forecasts, although the UK harvest will inevitably be down due to the awful weather earlier in the growing season. Ex-farm feed wheat is currently trading at around £188/t, but feed barley provides much better value at a £20/t discount and is worth considering as a cheaper ration ingredient. Wheat futures prices have also been showing an easier trend with July traded at £184.35/t and November has now dropped to £179/t.
Still a fair way to go, but hopefully not too much longer now before the majority of producers are in the black instead of the mire.
ThePigSite News Desk