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GB Pig Prices Continuing to Move Ahead

15 May 2017

UK - Although GB pig prices are continuing to move ahead, with the latest SPP rising by 1.29p to 157.82p, German producer prices have stood on and sow prices have slipped, writes Peter Crichton in his "Traffic Lights" commentary for 12 May 2017.

With the barbecue season almost upon us, hopefully, demand will continue to improve and although the general public are hoping for some ‘nice’ weather, farmers are praying for rain at a time when crops are really beginning to struggle and it looks as though straw is going to be at a premium this year, as well as reduced cereal crop yields, all of which will have an impact on producers’ bottom lines.

Most weekly announced contract bacon prices moved ahead by between 1p – 2p within the 158p – 163p range and spot bacon pigs remain scarce, but where there was any trade, this was in the 164p – 166p region.

However, cull sow prices took a bit of a hit, dropping by around 5p/kg deadweight due to price resistance in Germany where one processor was heard to say (not in English) ‘Can’t buy ‘em, can’t sell ‘em’.

German sow prices are something of a barometer for pig values across much of mainland Europe and it may be that these will take a bit of a dip next week, but hopefully a pause for breath rather than the start of a significant decline... We shall see.

As a result, UK cull sow quotes this week were around the £1/kg mark, but even at this level, a cull sow will buy 75 per cent of a gilt and now is the time for producers to look at re-stocking ageing herds.

On the currency front, the Euro traded on Friday worth 84.7p, which is almost exactly its value 7 days earlier, but an improvement on its midweek position which saw the Euro trading at around 84p, and for those of you who still struggle to get your heads around the effect currency fluctuation have on the pigmeat market, the stronger the Euro and the weaker the pound, the better.

The weaner market remains more bullish than Donald Trump, with the latest AHDB 7kg average quoted at £41.22 and now they have found their abacus, the missing AHDB 30kg weaner price from last week has risen to £58.83 / head. In all cases, spot trades are at significantly higher levels in what has universally become a seller’s market and what a contrast this makes with the situation 15 months ago, but follows the pig industry’s track record of either feast or famine.

On the cereal markets, UK spot feed wheat is currently trading on an ex-farm basis averaging £143/t and futures prices have closed slightly firmer, with May 2017 £149.90/t, July at £149.65/t and next May at £148/t.

UK protein prices have remained at generally similar levels with 48 per cent soyameal traded ex-Liverpool at £300/t and 34 per cent rapemeal ex-Kent at £170/t.

On a global basis, grain markets have had a generally bullish week following concerns over the quality and quantity of next season’s worldwide wheat crop and oilseeds have also gained, partly due to weather concerns, so now might be the time for farmers to spend a little bit of time taking some forward positions in case the market moves against them.

And finally, looking ahead to the post-Brexit situation, concerns are growing over the prospect of a ‘cheap food agenda’ which does not meet current standards (including welfare) and now is the time for the UK pig industry to further underline its quality assurance and welfare credibility at a time when cheap imports could be a major threat to our industry.

And finally, finally...

Question: What do you get when you play tug of war with a pig?

Answer: Pulled pork of course!

Trafficlights Peter Crichton

ThePigSite News Desk

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