Cull Sow Market Defies Gravity

by 5m Editor
9 August 2008, at 2:11pm

UK - Last week’s comment that a two-tier trade was opening up when comparing demand for cull sows with finished pigs, has proved even more apt today writes Peter Crichton.

Although the DAPP is a shade higher at 137.38p (137.22p last week), the general consensus is that the DAPP will probably remain more or less static until we get into the early autumn when the shortage of numbers starts to bite and demand improves.

As a result although pigs sold on DAPP related contracts are still netting useful returns, the spot market proved to be far more fickle with complaints of very poor high street demand coupled with a backlog of pigmeat in the system creating much more of a buyers’ market in this sector.

Most spot bacon was traded in the 135–137p range according to specification and with the August Bank Holiday now only 14 days away, we may have to wait until September before demand catches up with supply.

Lighter weight pigs continue to earn modest premiums with cutters traded at circa 140–142p, but very little uptake from those shivering around damp and sodden barbeques.

Cull Sows

The cull sow market on the other hand continues to defy gravity and although EU manufacturing pigmeat quotes have remained almost static, a significant shortage of numbers has forced the price up as UK export abattoirs chase diminishing volumes.

Because of this very few producers will have been paid less than 125p for sows with premiums available for larger loads and a typical 150kg deadweight cull sow is now netting circa £180 with heavier sorts worth well in excess of £200.

But the suspension of export refunds announced today may not help as far as manufacturing pigmeat trade from the EU to Russia is concerned which also includes cull sows.

Unfortunately the € is also working against the industry and has slipped in value to 78.4p compared with almost 79p a week ago.

Weaner Prices

Weaner values continue to reflect falling feed prices with the AHDB 30kg ex farm average now standing at almost £43/head, but still £3-£4 behind most recent trades.

Lower feed prices are benefiting the whole pig production system and not just weaner buyers with the latest spot ex farm feed wheat quotes of £111/t compared with £129/t year ago when the DAPP only stood at 110p.

But at the same time the industry has to cope with sharply rising energy and other production costs with most pundits quoting cost of production figures of circa 135p/kg deadweight which means that over the last 12 months which included the foot and mouth hiatus, most pig production businesses are still well in the red.

5m Editor