Spot Quotes Plummet

UK - Another challenging day for sellers with prices easing across the board with the DAPP dropping 0.78p to stand at 141.8p, the Tulip base price dropping by 1p to 142p including level delivery bonus and spot quotes down by up to 5p in some regions, writes Peter Crichton in this week's Traffic Lights commentary.
calendar icon 18 September 2010
clock icon 3 minute read

Although there are reports that retail trade has improved slightly with the colder weather, European Union producer prices are still circa 25p below ours.

As a result it was very much a buyers' market in the spot sector where quotes for heavy bacon on a 14 probe bottomed out at 130p and those on a tighter spec were able to negotiate prices of between 132p and 136p with modest 4–6p premiums still being paid for lighter weights.

Although the euro has remained more or less unchanged and closed on Friday worth 83.4p, cull sow prices continue to power ahead and lifted by another 3-4p this week due to better European demand and strong competition on this side of the water.

Sellers with large loads were able to agree prices of 110p/kg on a delivered basis with 105-107p being freely available via collection centres.

Relatively firm cull sow prices should provide a good incentive for producers hit by soaring feed costs to look carefully at culling any unproductive or older sows on their units.

Releasing a little more space throughout the grower/finisher system can also improve health and performance levels and can often be a case where "less is more".

The weaner market is also continuing to suffer from the deadly combination of rising feed and falling pig prices and although the Agriculture and Horticulture Development Board 30kg ex-farm weaner average is still relatively firm at 346.50/head, this includes a large number of contract pigs. Spot weaners have however been traded as low as 342/head in some areas.

With more abattoirs threatening to pull away from the DAPP the time is approaching when weaner contract prices may have to switch to a link to Tulip/factory prices instead.

It will be a pity if the DAPP gets kicked into touch by some of the big players as up to now it has provided a reliable pricing mechanism and let us not forget those times when the DAPP has been well behind spot.

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