Better Things to Come in the Weeks Ahead ?

UK - In this week's Traffic Lights commentary, Peter Crichton says it was probably better for sellers to be out of the office in the morning and return in the afternoon because as the day passed by a generally firmer demand for pigs started to filter through in the market perhaps heralding signs of better things to come in the weeks ahead.
calendar icon 30 August 2008
clock icon 3 minute read

Although the DAPP took a very slight downwards step from 136.99p to 136.43p, most spot buyers operated at stand-on levels.

Lighter weight pigs also met more interest as some of the fresh meat wholesalers reported better high street uptake and hopes that now the holiday period is now drawing to a close with the schools back next week, better demand will kick in.

Spot bacon quotes at the heavy end of the trade to 95kg on a 14 probe were in the 132 – 134p region, but lighter weights and those on a tighter spec saw bids in the 136 – 138p area and cutters worth circa 140p.

Cull sow prices continue to edge ahead from the already dizzy 130p platform which has become an almost universal “base price” with premiums available for larger loads, but sellers need to check if they are selling on a flat rate of a weight/graded basis.

The rising value of the € has also done the United Kingdom pig industry a few favours and closed on Friday worth 80.7p compared with 79.7p a week ago.

Reports are also emerging that in many of the meat markets, European carcasses are now being priced at similar levels to their UK counterparts or in some cases are even dearer.

Bearing in mind that the average EU producer price is now equivalent to 136p for a much heavier and often fatter carcass with lower bottom line deductions, this effectively means that imported carcasses will in some cases be dearer than our own and could open the door to pigmeat exports from the UK unless domestic prices start to move ahead.

The weaner market is also demonstrating more confidence in the outlook for finished pigs for the last quarter of the year with the AHDB 30kg ex-farm quote now almost touching £43/head, but still well behind recent transactions which have seen 30kg weaners traded in the £45 - £48/head range.

Overall the British pig industry is now looking in much better health than it did a year ago when we were in the grip of foot and mouth and limited cull sow exports meant they were only worth 55 – 60p/kg, but are more than double that today.

The late August 2007 DAPP was quoted at 109.14p and ex-farm feed wheat last harvest was trading at £154/t.

But this should be no reason for premature celebration because as the autumn approaches retailers will no doubt be playing hardball with producer prices and the credit crunch may well result in meat being replaced by baked beans in some households.

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