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Better Weather, Better Prices

10 June 2013

UK - Once of the most effective pig price barometers is the weather forecast and the long awaited arrival of the British summer has worked wonders as far as pigmeat demand is concerned, writes Peter Crichton.

Buyers and analysts working for the major British supermarkets watch the weather forecast like hawks and forward ordering for product is already taking place to allow for soaring barbecue demand after our seemingly endless winter.

As a result pigmeat prices are continuing to move ahead with the DAPP up to 165.05p, spot bacon selling at up to 174p/kg and after a hesitant start shout prices have also put on a further 2p/kg.

On this occasion Woodhead who have always been consistent front-runners in the shout price stakes are to be congratulated for being the first out of the starting stalls with a 2p rise which was then followed by the other runners with the result that the shout price steeplechase results now read as follows:

Woodhead 168p
Gills 166p
Tulip 165p
Cranswick 164p
Karro 164p.

Spot buyers remain hungry for pigs with numbers continuing to tighten with the result that 172p/kg proved to be an accurate base price with a copper or two more available in some regions.

Those selling lighter cutters were able to command premiums of up to 10p/kg above bacon, but the economics of selling underweight pigs is still questionable except for those producers forced to do so due to a lack of money or space (or both).

The euro ended the week very slightly easier worth 85.04p on Friday, but despite this sow prices are also flagging up better European mainland pigmeat values and rose by 2p–3p/kg this week with most trading between 103p–105p/kg, but still almost 25p/kg below their levels 12 months ago when the euro was also only worth around 80p.

Weaner prices are continuing to nudge ahead helped by a combination of a better outlook for finished pig sellers as well as some further easing in cereal costs.

The latest AHDB 30kg ex-farm weaner average now stands at £51.06/head and at this level, providing other costs stop rising, breeders and finishers may have the opportunity to actually breakeven or even make a profit.

Forward feed quotes are also painting a slightly better picture with July LIFFE wheat trading at £176/t with the same price for November.

European new crop wheat prices are generally showing a slightly easier trend on the back of better US weather prospects and the heavy rainfall across northern Europe does not look likely to hit yields too hard as much of the flooding has not affected arable areas.

Although the outlook for pig producers is certainly better than it was at the start of the year, analysts are keeping a cautious eye on the wide gap between European and United Kingdom pigmeat values. Cheaper imports pose a significant threat to the British market, but there is no doubt that much greater demand from some of the higher end retailers for British sourced and labelled pigmeat following the Horsegate scandal has helped.

Trafficlights Peter Crichton

ThePigSite News Desk

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