Good News in Latest Pigmeat Market Stats

UK - If there was a Gold Medal for the number of times the words “short week ahead“ have been uttered, the United Kingdom meat trade would win it, says Peter Crichton in this week's Traffic Lights commentary.
calendar icon 23 August 2008
clock icon 3 minute read

Despite this demand has held at a very fair level and whilst there was little room for any spare pigs, where spot bacon was wanted prices in the 134–135p region were available.

The DAPP caught everyone by surprise by actually moving up from 136.85p to 136.99p.

As a result contract prices on a DAPP plus 4p basis were producing a much better return than spot equivalents, but when the shortage of pigs starts to filter through to the market as a whole spot quotes are expected to move sharply higher this autumn.

Although finished pig values have remained at similar levels, cull sow prices continue to move ahead, more due to a lack of supply than any real improvement in demand with EU prices reported to be at static levels.

Cull sow quotes have now breached the 130p ceiling for large loads and although buyers would like to purchasing in 125p region, very few were able to operate at much less than 130p with any success.

Weaner prices are continuing to harden due to the prospect of cheaper feed prices this autumn and better finished pig returns.

The latest AHDB 30kg ex farm average of 342.90/head is still well adrift of many private trades which are taking place at around 34% of the DAPP at circa 346.50 per 30kg pig ex farm.

Recent publication of the June Pig Census is flagging further shortages in pig numbers in the months ahead now that the UK breeding herd has fallen to a new recent low of 400,000 head.

Unsettled weather continues to play havoc in the harvest field and is also putting upward pressure on straw quality and prices.

With large areas of feed wheat still to be cut the market still has a bearish feel to it with ex farm feed wheat quotes circa 3113/t (compared with 3142 in August 2007) and forward prices also indicating much more of a buyer’s market than was the case a year ago.

Finally more good news is also contained in the latest pigmeat market statistics where in some cases foreign carcasses are now being traded at higher prices than their United Kingdom counterparts.

If this trend continues it could well open the door for United Kingdom exports to Europe, which would certainly put a base in the heavy pig market and prevent some of the more hardnosed retailers trying to drive prices any lower.

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