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Every Graph Paints a Bleak Picture

by 5m Editor
8 November 2010, at 1:00am

UK - With feed prices going up like a Guy Fawkes rocket, although sellers were relieved that none of the big players added any more fuel to the pig industry bonfire by dropping their prices yet again, many producers are now operating at a loss, writes Peter Crichton in his Traffic Lights commentary.

This trend could get worse in the months ahead as cheaper feed cover runs out and a higher proportion of pigs are fed on rations bought at post-harvest prices.

The DAPP actually moved up by a gnat's whisker to 137.69p and after all the disappointment of last week Tulip and Cranswick both stood-on with their weekly prices of 136p plus 2p LDB for the former and 137p for the latter.

Slaughter levels are rising in the run up to Christmas and there were no reports of any significant numbers of pigs being rolled, which is always a good sign for this time of year, and as a result most spot bacon was traded a shade above 131p and only weak sellers or pigs sold on a wide range/high probe spec traded at less than this.

The smaller fresh meat wholesalers are reported to have had another relatively quiet week, but those producers prepared to sort out gilt pigs for niche contracts were rewarded with prices 4–8p ahead of commercial bacon.

At least the euro has held at almost identical levels to last week closing worth 86.8p, but we will have to hope that Sterling does not improve in value as this would effectively weaken the euro opening the door to yet more cheap imports.

Cull sow prices have remained at firm but unspectacular levels with shrewd sellers of large loads able to command prices on a delivered basis in the 98p region, but some quotes as low as 92–94p were heard and were undersold at this level.

The weaner market continues to reflect the reality that the industry faces in connection with much higher feed prices with the AHDB 30kg ex-farm average quoted at £43.57/head, but several reports of 30kg pigs being sold for less than £40/head compared with almost £60 in June.

For those chartists amongst you nearly every graph relating to the pig industry paints a bleak picture and is heading in the wrong direction with the United Kingdom pig breeding herd now around half its size 10 years ago, wheat prices almost double their June 2010 levels and pig prices in retreat with the DAPP having fallen from 155p in June 2009 to 137.69p today.

There is no doubt that in order to survive the pig industry as a whole will have to persuade the retailers to put up their prices or we will be facing a repeat of what happened in 2007/2008.

The recent NPA members vote not to increase a supplementary marketing levy received a mixed response with some feeling "you have got to give if you want to gather", whereas others felt that the last thing they wanted to face was another deduction adding to their losses. Time will tell whether this was the correct decision or not.