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Euro Rise Fails to Filter Through

by 5m Editor
15 November 2008, at 5:00am

UK - Whilst some spot buyers were prepared to offer quotes in the 127–128p range others took a more hard-hearted approach with bids of 4–6p below this, but in most cases buyers at every level were able to find enough pigs to meet demand with additional numbers being rolled into the following week, writes Peter Crichton in his Traffic Lights commentary.

Demand for handy weight cutters from some of the smaller fresh meat plants generally remained at similar levels to last week peaking at just over 130p, but buyers were spoilt for choice with extra numbers available at lighter weights.

Although the value of the € has now soared to record levels touching 86p in value on Friday (up by over 6 percent compared with seven days ago) and this has effectively put up the cost of imports, with plenty of United Kingdom produced product available this benefit has failed to filter through to the finished pig market.

The rise in the value of the € was however immediately felt in the cull sow market. Last week’s quotes in the 104–107p range were worth anywhere up to 5p more for next week simply due to the adjustment in value of the currency and the fact that EU cull sow prices have after several weeks of sharp falls now stabilised and in some cases may even rally by a penny or two in the run up to Christmas, providing supplies stay on the tight side.

There is no doubt that a shortage of United Kingdom pigs in on the horizon, but is unlikely to be felt in the market until next March/April and this is to some extent putting a damper on 30kg weaner prices which are due to be finished before then.

The latest AHDB 30kg ex farm weaner price has slipped from 343.94/head to 343.29/head, although 7kg prices have tended to remain firmer at circa 332.50/head as these have a chance to face a better future as finishers next spring.

All in all a disappointing day for spot pig sellers and we really need a white knight to appear in the spot market to mop up those extra pigs at a fair price rather than discounting them heavily to try and balance the books with much more expensive contract pigs still in the system.

Currently the Christmas period looks like the darkness at the end of the tunnel and we will all have to hope for better things in the spring.