Prices Hold (Just)

UK - Contract prices continue to move ahead in line with a further improvement in the value of the DAPP which now stands at a 153.36p, writes Peter Crichton in this week's Traffic Lights commentary.
calendar icon 13 June 2009
clock icon 3 minute read

The Tulip base price also rose to 157p and contract sellers would appear to be better off than their spot counterparts by a copper or two.

Although some of the smaller fresh meat wholesalers are complaining of rather slow demand, bearing in mind the inclement (and in cases torrential) weather during the past week this is hardly surprising and signs of summer weather in the days ahead should help to stimulate barbecue demand.

Most of the larger abattoirs found enough contract pigs to meet their throughput which meant there was less need to go shopping in the spot market.

As a result spot bacon quotes tended to remain in the 153–156p range according to specification with lighter pigs going into niche outlets worth circa 160p.

Pigmeat traders are also casting slightly anxious glances at currency exchange rates which at close of business on Friday saw the euro drop in value to 84.8p compared with 88.2p a week ago, a drop of almost 4 percent, which effectively means that imported pigmeat can undercut the British market by a further 5p/kg deadweight and cull sows are also worth proportionally less.

European cull sow prices are now circa €1.35 which converted back to our currency is equivalent to 113p before slaughtering and delivery costs are taken into account.

Although sow export abattoirs would like to buy at around 31 per kg deadweight, in many cases because of the shortage of numbers in the system bids of between 106p and 110p were still available.

Weaner prices have however been held at very firm levels with the AHDB 30kg ex-farm average closing at 357.21/head and in some regions the 360 weaner is now a reality.

Weaner buyers are however continuing to ask questions about pig health and in many cases it is now essential for sellers to use one of the PCV2 vaccines.

Reports of swine dysentery are also continuing to rumble through the market and this scourge seems to be spreading from East Anglia in a northerly direction, although only on a fairly sporadic basis.

In the feed market the recent rains have helped to put slight downward pressure on the feed wheat market with ex farm quotes of circa 3110/tonne compared with 3114/tonne a week earlier.

In the longer term however there is still plenty of upside in the grain market and producers would be well advised to get forward cover to eliminate the possibility of a grain price surge hitting their margins and profitability.

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