Shortage of Pigs Drives Prices to 150p for Some

UK - Pig sellers enjoyed another day of rising prices as Friday wore on and rather like the winner of the Gold Cup today, finished on an uphill note, writes Peter Crichton.
calendar icon 14 March 2009
clock icon 4 minute read

Predictions that the 150p/deadweight benchmark would be broken today proved correct (but not universal) with some spot abattoirs still very short of enough United Kingdom pigs to fill demand out shopping on Wednesday/Thursday. Although some of the larger players were suggesting that their bids would be in the 145p region, by Friday afternoon prices in the 148–152p range according to specification were available.

Once again demand from the large supermarkets seems to be outstripping the smaller wholesalers and only fairly modest premiums were available for lighter weight cutters of 3–5p/kg.

On the basis that “weight is money“ those producers with outlets for pigs in the 90–95kg range are reaping the benefit and it is hard to justify a selling a lighter pig unless premiums of 15–20p/kg are available.

Improvements in the strength of the euro which closed worth 92p on Friday compared with 89.8p seven days earlier has also helped to jack up the cost of imports and at the same time has added further value to cull sow quotes at a time when across Europe manufacturing pigmeat prices have remained virtually static.

British pig producers have the strength of the euro to thank for the current spell of better prices. If our pigs were sold in euros, we would be well below breakeven levels and facing the same financial problems as many of our counterparts on the European mainland.

A combination of the weakness of sterling and shrinking United Kingdom herd numbers helped to lift cull sow bids by around 2p/kg compared with last week, although there is still a fairly wide range of prices on offer from different abattoirs with 116p–118p available in some areas and 120p on the table for larger loads.

Although the latest December 2008 census flagged up only a relatively small drop in the size of the national herd, more evidence is emerging this could be an understatement and that the number of productive sows coupled with more fertility problems is hitting weaner availability quite hard.

As a result weaner values are continuing to soar with the 350 30kg pig now commonplace and even the slow moving AHDB 30kg ex-farm average has now managed to clamber its way up to 349.97/head, but reports of private trades of weaners in the 353- 355/head range where big numbers are involved.

Although reduced supplies can often mean increased demand, this is not universally good news for the industry as a whole because there are fewer and fewer abattoirs to sell to and this trend could continue as supplies diminish and more mergers/abattoirs closures are forecast.
Some abattoirs are caught between a rock and a hard place as they need full throughputs to cover their fixed costs and cannot get enough pigs (unless they pay more than the market price) while some of the larger retailers are threatening to cut their prices putting them under yet more financial pressure at a time when additional credit is hard to source.

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