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Lighter Pigs May Find Premium in Christmas Run-up

by 5m Editor
31 October 2009, at 1:58am

UK - Although sellers reported they were able to place most of their pigs next week, space remains fairly tight and spot sellers were in many cases forced to accept lower bids rather than face the risk of rising weights and probes in the run up to Christmas, writes Peter Crichton.

The DAPP has slipped again to 144.07p, but still looks a much better bet than the spot market where bids of almost 20p below this were heard in some quarters.

Spot prices for heavy bacon on a 14 probe of circa 125p were available, but on a tighter spec quotes tended to be 127–130p.

Reports of more interest from the smaller fresh meat wholesalers provided one glimmer of light on an otherwise rather unremarkable trading day and there may be opportunities for producers to capitalise on the better prices available in the market for lighter pigs in the run up to Christmas where premiums of 4–8p/kg are available.

A recent slip in the value of the euro which closed on Friday worth 89.5p compared with 91.8p a week ago has done nothing to help cull sow values which saw export spec prices falling with bids in the 108–110p range.

Something of a two-tier trade has developed in the weaner market where 7kg piglets (which will not hit the finished pig market for another 4–5 months) remain in demand and selling relatively well, but the shorter term prospects for 30kg weaners are affecting this sector where prices continue to ease and the latest AHDB 30kg ex-farm average weaner price is now quoted at 349.28/head, but signs of further drops are in the pipeline.

Feed prices continue to be influenced by the currency markets with ex-farm feed wheat quotes of circa 394/tonne and delivered prices of just above 3100/tonne.

With only 36 slaughtering days left until Christmas, the advice to producers is to keep on top of their pigs (rather than underneath them), but the oncoming cold snap may help to slow down growth rates and improve retail demand to prevent any further price deterioration in this sector.