Demand Gets Slightly Better

UK - In this week's Traffic Lights commentary, Peter Crichton writes that talk last week of pig numbers building up in the pipeline proved to be something of an over exaggeration with the result that most spot sellers were able to achieve stand on quotes today.
calendar icon 22 November 2008
clock icon 3 minute read

The DAPP continues to edge downwards and is now quoted at 132.75p compared with this year’s peak of 137.38p in early August so contract prices are basically 5p below their best, but still well ahead of equivalent spot bacon quotes which were generally in the 127p region today.

Slightly better demand from some of the smaller fresh meat abattoirs for cutter weight pigs saw quotes in the 130–134p range and all sectors of the trade have been helped by the rising value of the € which continues to put up the cost of those dreaded imports.

The € opened on Friday at 83.8p closing at 84.6p and whilst investors continue to have the jitters on the outlook for the United Kingdom economy, downward pressure on the 3 could continue to help lift the value of the €.

Cull sow prices have certainly benefited from the currency market situation and are also reflecting lower United Kingdom numbers available due to further reductions in the size of the national herd.

As a result quotes improved by circa 4p compared with last week and very few sellers were prepared to let sows go at less than 112p according to specification and region with large loads worth a premium.

Weaner prices are also starting to reflect an upcoming shortage of future supplies. The AHDB 30kg ex farm weaner average remains almost static at 343.21/head, but most farm to farm trades have been 32- 33/head higher than this according to quality and availability.

Although we are now all tending to look towards the next spring as the next occasion on which prices are likely to rise, European Union producers are in particular having a bumpy ride and in many cases losing money which may well help to put the United Kingdom industry back into the black next spring as imports dwindle.

But extra funds will be needed judging from the new mountain of paperwork landing on pig farmers’ desks associated with the upcoming NVZ rules which become effective from the 1 January next year.

For those of you concerned about IPPC applications, as far as the NVZ situation is concerned, “you ain’t seen nothing yet“!

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