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Have Prices Bottomed Out for the Time Being?

by 5m Editor
2 October 2010, at 6:27am

UK - Despite the Tulip base price dropping 2p to 140p (including level delivery bonus) and the DAPP which also shed 1.25p to stand at 140.05p, spot prices generally operated at stand-on levels and no further falls of any consequence were recorded, writes Peter Crichton.

There seems to be a feeling in the trade that prices have for the time being "bottomed out" with large numbers being handled and very few reports of pigs being rolled.

It seems that a combination of rising retail demand now that autumn is well and truly here and the colder weather which tends to suppress pig growth rates and improve the appetite of human beings for pigmeat, have helped to put a little confidence back into the market.

As a result spot bacon quotes held generally firm but at disappointingly low levels around the 130p mark and contract sellers are still benefiting from a premium of around 10p/kg when compared with spot.

However European Union prices are continuing to slide, which makes imports a very real threat and another reason why we need to continue to promote pigmeat to the consumer and support the "Butler levy" proposals.

The rising value of the euro has been another plus point for the industry, closing worth 86.7p on Friday compared with 85p a week ago, which effectively puts up the cost of imports by 3 percent (3.6p/kg) and also adds around 3p to the value of cull sows which would have fallen further without this currency movement.

Cull sow prices have also been a ready barometer of European Union mainland values and are pointing to more stormy weather ahead with British cull sow quotes dropping by circa 5p/kg and those shrewd sellers who were lucky enough to obtain 110p last week are now looking at 105p and collected rather than delivered prices slipping to between 98p–102p. Anything traded at less than this was probably undersold, but reports of more competition in the north/south cull sow sector soon may add a little more competition to the market.

In horse racing terms the weaner market remains subject to "heavy going" and the Agriculture and Horticulture Development Board 30kg ex-farm average slipped again to 344.60/head, but spot weaners looking for homes have been traded at 32- 34 below this is some regions.

Although feed wheat prices have eased back to circa 3150/tonne from earlier peaks they are still making producers' eyes water coupled with expensive soya and unfortunately those without feed cover are in some cases selling pigs at below their CoP.