Plenty of Pigs Being Offered on Contract

UK - With no more short weeks to disrupt trading patterns until the end of August, normal service has been resumed and most abattoirs were looking for fairly big numbers on Friday to meet barbecue demand now summer appears to have arrived, writes Peter Crichton.
calendar icon 30 May 2009
clock icon 3 minute read

DAPP continues its almost unstoppable upward track and now stands at 152.38p, but for those statisticians out there this is still a little way off the high point achieved by the AAPP, which on 16 July 1997 hit a remarkable 155.08p (my thanks to Simon Guise for this), but bear in mind that in July 1997 the Retail Price Index stood at 157.5p and is now 211.5p, meaning that in real terms pig producers should now be receiving 209p/kg to match this, based on a 12 year comparison.

One mixed blessing of the rising DAPP and the Tulip contract price, which is now at 154p, was that most of the big buyers were being offered plenty of pigs on contract which meant they did not need to venture far into the spot market.

Those spot buyers who were active however, were generally prepared to pay 152–155p for bacon according to specification, with lighter weights starting to earn a reasonable (but still insufficient) premium in the 158–162p range.

In the currency markets there were no further signs of any real improvement in the value of the euro which closed on Friday worth 87.6p, but there are some suggestions that sterling will continue to strengthen at the expense of the euro and if this is the case the implications would not be good for the British pig industry.

Although there were reports of slight price increases from some German cull sow processors others remained unchanged and when combined with the currency situation, despite relatively short United Kingdom cull sow availability, most buyers stood on with bids in the 108–112p range according to load size and specification.

European pigmeat values also remain rather static which is a worry especially if coupled with any further reductions in the value of the euro this could lead to more imports hitting these shores and undercutting the British product.

Weaner prices are still very firm with the AHDB 30kg ex-farm average quoted at 356.50/head and the usual 32– 34/head premiums available, especially from buyers north of Watford.

In the British grain market although there are reports of significant holdover stocks from the 2008 harvest, if the current dry conditions continue it might be a good idea to take further cover now at a time when feed wheat ex-farm quotes are still relatively low with this weeks price of 3112/tonne compared with a 3145/tonne a year ago.

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