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A Refreshing Change...

by 5m Editor
9 October 2010, at 9:37am

UK - "Stand-on" predictions proved to be correct and it was refreshing to note that there were no reports of any significant numbers of pigs being rolled into next week, with many processors upping their kills at a time of year when we normally expect to see demand improve.

Although the DAPP continues to lose ground, it only nudged marginally lower to 139.91p and Tulip after its big 2p drop last week came out with a more benign stand-on at 140p including LDB (level delivery bonus in case you wondered).

The spot market remains a fairly chilly environment when compared with contract, but with very few exceptions 130p proved to be a base price for heavy spot bacon to 90kg on a 14-probe with tighter specifications paying a little more (but in net terms more is quite often less).

Producers who were prepared to sort out gilts or sell pigs at slightly lighter weights continue to be rewarded with premiums of around 10p above spot bacon and these niche jobs with some of the smaller wholesalers are certainly worth seeking out.

The euro has continued improve in value, although it is now rising at a slower rate, increasing from 86.7p to close on Friday worth 87.3p.

Despite a firmer euro, cull sow prices continue to tumble and lost another 5p this week due to much larger numbers being slaughtered throughout Europe caused by the lethal combination of high feed and low pig prices.

British producers have had the benefit of 20–30p/kg more than their foreign counterparts, mainly because we prefer not to produce our pigs from large intensive production line type farms and there must be a lesson in this for us all.

As a result, 100p/kg has now become a distant memory and the highest prices for shrewd sow sellers with large loads were in the 97p region with the majority between 96p–94p, but long queues are building up.

The weaner market continues to suffer from a lack space, much of which has been caused by some of the larger buyers having enough of their own pigs coming through the system to avoid going into the market, with the latest AHDB 30kg ex-farm weaner average now standing at 344.76/head, which is a whopping 310/head reduction since last June.

The feed market is not for the fainthearted with reports of sharply rising United States prices and the UK Liffe futures market saw November wheat traded up 37/tonne to 3164/tonne.

It looks as though we are heading for another period of survival of the fittest and producers should be looking at every single aspect of their production to see where costs can be trimmed and production efficiency improved.