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A Further Mysterious Rise in Sterling Didn't Help...

by 5m Editor
30 January 2010, at 7:17am

UK - As expected demand in the spot market seems to have steadied and some of the smaller fresh meat abattoirs were less keen on pigs than the large mainly contract plants supplying the supermarket trade, writes Peter Crichton in his weekly Traffic Lights commentary.

As a result spot bacon quotes tended to be in the 138–140p region, although some opening bids in the 136p region were made to those less fortunate producers who did not have a regular homes for their pigs.

There is currently very little of a premium for lighter weights and it is clear that demand is being led at the bacon end of the trade, which is normal for this time of year.

A glance at the calendar however reveals we are almost into February and by the end of the month prices normally start to rise. At least producers will lose less in February as it is a shorter month!

The ongoing problem affecting prices is the relative cheapness of imported pigmeat with reports of Belgium carcasses coming over ex head and feet at less than 140p, which certainly makes it difficult for British sellers to compete at the commodity rather than the higher welfare end of the market. Nothing good apart from beer and chocolate seems to come from Belgium.

The DAPP nudged up a shade and now stands at 138.97p which is 7.5p up on its position a year ago and with wheat being quoted at not much more than 390/tonne ex farm, this is a pleasant change for January 2009 when sellers were looking for 3111/tonne.

Although European Union mainland cull sow prices seemed to have levelled after falling almost continuously since the last summer, unfortunately a further mysterious rise in the value of sterling is working against us and the euro closed on Friday worth 86.6p compared with almost 90p at the start of 2010.

On the plus side however, with more stable European Union prices and a shortage of cull sow numbers on this side of the Channel, most buyers were operating in stand-on mode with quotes in the 92–94p range, but an odd copper or two extra for larger loads.

The weaner market remains the brightest sector of the trade with the AHDB 30kg ex-farm weaner average continuing to rise and now standing at 351.02/head with buyers in a reasonably confident mood as far as finished pig prices 12 weeks ahead are concerned.

If only the pound could lose some value we could see a rally in domestic prices with fairly widespread reports of numbers remaining on the tight side stretching back to infertility problems last summer, as well as the problems caused by the recent cold weather which seems to be returning.

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