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Pigs Short, Euro Rampant

by 5m Editor
6 December 2008, at 6:11am

UK - Pig prices took their cue from a rocketing € which touched a new record high of 87p on Friday and also added value at a time when the market normally comes under pressure, writes Peter Crichton in his Traffic Lights commentary.

Although early on Friday morning spot sellers were suggesting they would be prepared to pay circa 128p, by the afternoon bids in the 130p plus region were being received from some abattoirs still short of stock and the old saying “the coldest are the hottest“ came into play.

The DAPP however has continued to slip and is now at 131.61p which matches its value at the end of June when the € was only worth 79.1p. Not long now perhaps before the DAPP and spot prices cross over.

For those of you who find it hard to do the maths, this means that over the past 12 months currency changes alone have added 15% to the cost of imports and have also increased cull sow values by a similar amount.

If the € continues on its upward track we could see the Booze Cruise in reverse soon with pot bellied Frenchmen in white Renault vans traveling to Dover to buy cans of warm British beer.

Other reason for the recent improvements in United Kingdom pig prices are linked to reports of lower weanings in the autumn and reduced numbers coming through the system coupled with a drop in growth rates due to the recent cold snap.

Clear signs are emerging that when the December 2008 census is announced we will see the domestic sow herd below 400,000 head for the first time in living memory, but this may unfortunately lead to an even higher proportion of imports penetrating the domestic market.

Further evidence of falls in the size of the domestic herd are seen in the cull sow slaughtering statistics through the three major slaughtering plants which dropped to 14,400 in November compared with 27,000 in January when a mixture of high feed prices and the foot and mouth crisis had pushed many producers to the exit door.

Partly helped by fewer numbers and the rising € cull sow quotes have also continued their mini recovery with most bids in the 116–120p range according to load size and specification and anyone who sold at less than this was probably under the market.

Weaner prices have yet to reflect an upcoming shortage on the supply front with the AHDB ex-farm quote relatively static at 343.20/head, but most traders found they had to pay 32- 33 more than this to secure the numbers required.

Although most finished pig sellers face January with a certain amount of trepidation, providing that numbers continue to tighten and Gordon Brown’s imprudent 3 wastes away, this will hopefully not be the case.