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Another Good Day... Bids to 142p

by 5m Editor
20 December 2008, at 8:06am

UK - As the year draws to a close, there are certainly more positive signs in the market than negative ones providing the € continues its remarkable rally, writes Peter Crichton in this week's Traffic Lights commentary.

The latest DAPP quote which has slipped a shade to 130.84p is now in most cases below equivalent spot quotes before taking into account the 4p or so DAPP premiums that most contract sellers receive.

Many buyers and sellers had already sorted their numbers out for next week well in advance and although the spot market was reported as quiet, prices and quotes have remained firm.

Spot bacon was generally traded in the 130–133p region according to spec and smaller fresh meat wholesalers were certainly more interested in the lighter weights and prepared to pay reasonable premiums with bids anywhere in the 136–142p range reported.

With the major European cull sow processors winding down for the Christmas/New Year break, United Kingdom sow abattoirs were generally only looking for an odd few loads to fill containers and were generally offering in the 110–114p range, but no real appetite for numbers.

The picture is expected to be different for the week commencing 29 December when apart from New Years Day normal service will be resumed.

The weaner market continues to reflect the upcoming shortage of pigs throughout the system, although this has yet to be reflected in the latest AHDB 30kg ex-farm weaner average of 343.60/head partly due to the link to the DAPP which rather like a pensioner on a staircase is slow to come down and even slower to go up.

But the main focus of British pig prices continues to be tied to fluctuations in the currency markets.

This has proved to be one of the most volatile weeks since the € was launched which a week ago was worth 89.8p, had soared to 95.4p on Thursday and dropped back to 93.3p on Friday.

This however still represents a year in year rise of a whopping 25 percent which is the amount by which the cost of imports has risen, but if the situation happens in reverse we would see falls of similar amounts and uncalculated damage caused to the British pig industry as a whole.

Next week most pig trading will take place on Christmas Eve rather than Boxing Day and it will be interesting to see to what extent recent firm prices have been maintained.